Net worth of India's wealthiest segments to grow by 15% till 2022

19 June 2018 Authored by Consultancy.in

The wealthy are only set to get wealthier in India, as the economy makes its way to the top of the global pile. According to the latest ‘Global Wealth’ analysis conducted by management consultancy The Boston Consulting Group (BCG), the wealth of high net worth individuals (HNWIs) in the country is expected to grow by 15% up till 2022. 

The global economy might have been navigating a few ups and downs in recent years, but those in the upper echelons of the financial world appear to be riding the wave with ease. BCG’s report zooms in on the personal wealth figures of the most affluent segments of global society, limited to the 97 countries that contribute 98% of the world’s GDP.

Among a range of positive factors, stability across global markets and the consequent strengthening of international currencies against the dollar ensured that personal financial wealth (PFW) across the globe registered growth of 12% over the last year, which is not only triple the growth in the previous year, but also represents the strongest growth rate in five years.

In absolute terms, global PFW reached a value of nearly $202 trillion last year, around $122 trillion of which was in the form of investable assets (equities, bonds, deposits, etc.), while the remaining amount was comprised of assets such as life insurance and pension funds – which represent a much lower level of liquidity.

Ultra High Net Worth Wealth

While global wealth remains concentrated in North America (40%) and Western Europe (22%), the growth figures were driven by Asia, where PFW grew by as much as 19% to reach $36.5 trillion. The regional growth comes in tandem with the GDP across the region, as China and India continue their economic expansion.

Private wealth in India

India’s growth story continues to be complex in nature. On the one hand, much of the anticipated GDP growth can be attributed to a young, working age population with a rising level of digital access. This is the segment responsible for the sharp spike in entrepreneurship in the country – often termed as the startup revolution.

On the other hand, the current economic growth of the country is driven by a handful of monumental businesses, historically controlled by a small group of wealthy families. The digitalisation drive, for instance, has come on the back of the introduction of Reliance Jio – a telecom service that offers data access at exceptionally low prices – controlled by Indian business magnate Mukesh Ambani, who is worth an approximate $42 billion.

The TATA Group – run by the Tata family – recently saw their consulting arm cross $100 billion in market capitalisation, while Infosys founder Nandan Nilekani recently donated $1.7 billion to Bill Gates’ The Giving Pledge for philanthropic purposes, demonstrating a substantial level of wealth. In essence, India’s billionaires are increasing in number, and are getting wealthier by the year.

A report from Strategy& last year revealed that the number of billionaires in India increased from 16 to 100 over just one year between 2016 and 2017. Classified as HNWIs and Ultra HNWIs, these billionaires cumulatively control $600 billion, 33% of which is in the form of liquid investable assets, as per BCG’s report. The report also projects a compounded annual growth rate of 15% for PFW in India between now and 2022.

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