[ecis2016.org] Amidst the heightened concerns on inequality that has been on a steady climb across the globe, in general and particularly in India, a study has found that the number of rich households has grown at a faster pace than their collective net worth in the country, in 2017
The number of ultra-high net worth households in the country, which represents those with a net worth of over Rs 25 crores, has grown 12 per cent to over 1.60 lakhs in 2017, while their collective net worth grew by only five per cent at Rs 153 trillion, according to a study commissioned by Kotak Wealth Management.
You are reading: Number of rich households grows by 12 per cent in 2017: Report
The findings of the study come, even as there are increased concerns on rising inequality, especially after a 2017 paper by economists Thomas Piketty and Lucas Chancel and also a report by the non-profit Oxfam, ahead of the World Economic Forum earlier in 2018.
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While the paper by the French economists argued that the post-1991 reforms have seen a rise in inequality, the Oxfam report said that in 2017, the top one per cent of the population, cornered as much as 73 per cent of the wealth generated. When asked about the divergence, Kotak Wealth Management’s chief executive Jaideep Hansraj, said their study has not gone into the inequality aspect. “We’ve stuck to what we think, where these set of ultra-high net worth households would grow to, will spend their monies and where are they growing, rather than us getting into those issues (of inequality),” he said.
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The study says that over the next five years, the number of such households will double to 3.30 lakhs and their net worth will grow to Rs 352 trillion. Hansraj claimed that despite negative events like the note-ban, which has pulled down GDP growth, one of the most important factors determining wealth for the category, its estimates have come out true in the last seven years, since it has been coming out with the such reports.
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Apart from GDP growth, the survey done by global consultancy EY uses data points on savings and investments in asset classes like mutual funds, realty, gold and equities and also bank deposit growth, to arrive at its estimates, a senior official said. Hansraj said events of the past fortnight in the equity markets have been ‘crazy’ and added he expects a move to preferring the debt market investments over equities, if this trend continues. He, however, said there will not be a return to investing in physical assets like gold and real estate and investing in financial assets, which got a fillip due to the note-ban, will continue.
An increasing number of the rich are adopting to ‘ad-hocism’ as their investing is opportunity-driven, he said. The survey says there is a trend of more wealthy people emerging from smaller cities and expects this to continue. Hansraj said investment in agriculture and infrastructure-linked sectors, will be a noticeable theme for 2018.
He said spends on philanthropy have been on the rise in the past few years but declined to answer specifically whether this was due to rising inequality.
Source: https://ecis2016.org/.
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Source: https://ecis2016.org
Category: Lifestyle
