India has huge wealth inequality—nearly 50% of wealth held by HNWIs
The India Wealth Report 2021, produced by the South Africa-based New World Wealth (NWW), indicates that the country has a very high wealth inequality. A whopping 48 per cent of the wealth is held by high net worth individuals (that is, millionaires and above), who number just 3.3 lakh, or 330,000, a minuscule proportion of the country’s population of 136.6 crore, or 1.366 billion (population as per World Bank).
The first India Wealth Report (IWR), produced by the South Africa-based research outfit New World Wealth (NWW), observes that India has 3.3 lakh, or 330,000 high net worth individuals (HNWIs) or millionaires (that is, those with a net asset of 1 million dollars or more).
The report also says that India has a particularly high number of billionaires compared with other countries. The number of dollar billionaires, that is, individuals with a net asset of 1 billion dollars or more, is 120.
The IWR 2021, which collected data till December 2020, does not offer any other explanations on its observations.
However, the Global Wealth Migration Review (GWMR) for 2019, one of the flagship reports of New World Wealth, had sought to highlight the inequality linked to the concentration of wealth in the hands of few.
The 2020 edition of the GWMR was also the one cited by Bengal Finance Minister Amit Mitra in a tweet on October 21 to highlight the flight of capital from India during the regime of Prime Minister Narendra Modi.
The GMWR 2019 argued that if more than 40 per cent of a country’s wealth is in the hands of HNWIs, there could be little space for a meaningful middle class. The ideal ratio should be under 30 per cent.
In India’s case, according to the 2019 report, 48 per cent of wealth is held by HNWIs, which is way above the ideal ratio of 30 per cent, the global average of 36 per cent and the critical mark of 40 per cent.
Thus, the high number of millionaires and billionaires in the country indicates the concentration of wealth in the hands of a very few, which implies high inequality.
In terms of numbers, according to IWR 2021, the country has a total of 3.3 lakh, or 330,000 HNWIs, that is, those with net assets worth $1 million and above. Among them, the number of people having net assets of $10 million, $100 million and $1 billion are 21,000, 1,074 and 120, respectively.
Thus, a whopping 48 per cent of the wealth is held by just 0.02 per cent of the population (millionaires and above number 3.3 lakh, or 330,000, out of the total population of 136.6 crore, or 1.366 billion, the data on the latter being taken from the World Bank).
Going by this parameter (ratio of wealth in the hands of HNWIs), Japan appears to be the most equal country, with only 24 per cent of the wealth with millionaires, and Saudi Arabia the least, where 56 per cent of the wealth is with HNWIs.
