India sees number of billionaires and millionaires increase by 500%
Driven by the rapidly expanding markets of China and India, Asia is now home to more billionaires than the United States, although a considerable gap still exists between the net worth of the billionaires in the two regions. A new report, by Strategy& and UBS, sheds light on billionaire wealth distribution across the world.
Having suffered a bit of a slowdown in 2015, the world’s billionaires are back on track for wealth accumulation, as their total wealth grew by 17% in the last fiscal year. Billionaires across the world now control $6 trillion of the world’s wealth, up nearly a trillion from $5.1 trillion last year. The figure is also boosted by the 145 new people who have joined this elite club, taking the total membership up to 1,542.
As per the analysis, conducted by Big Four Professional services firm PwC's Strategy& subsidiary, the phenomenal growth in the number of billionaires and the wealth generated by them can be attributed primarily to four sectors of the economy: materials, which contributed 31%; technology generated 23%; industrials, which contributed 28%; and lastly financial services, which added 16%. Other factors include the recovery of commodity prices, especially oil, after a slump in 2015.
637 of the total number of billionaires belong to Asia, which represents the largest regional group. China is home to most, 318 of these, while India is in second place with 100. However, India recorded the highest number of new additions, with 84 new billionaires this year alone, compared to 67 new ones in China. The number of billionaires in India sat at 16 last year, representing a 500% increase this year. Factors responsible for the boom in billionaire wealth across Asia, according to the report, come in the form of a boom in housing retail prices and the fluctuation of the dollar.
The report states that the billionaires of the age primarily consist of those delving into technological solutions, or those working on improving the standard of living in emerging economies. In such a scenario, it comes as no surprise that the number of billionaires and in India and the amount of wealth created by them has shot up. A BCG report earlier this year predicted that India would have 850 million online users by 2025, the wide access being driven strongly by the affordable high-speed data provided by Reliance Jio, a service provider that is a subsidiary of Reliance Industries, owned and run by Indian billionaire and business tycoon Mukesh Ambani. Through Reliance, Ambani alone has a monumental net worth of $42 billion, which makes him the richest man in India and the 33rd richest in the world
Another major project set to affect nearly 800 million people in India and globally is the partnership between Infosys and Tonetag to provide sound-wave based FinTech solutions that will increase transaction speeds. The project will add significantly to the approximately $2 billion net worth of Infosys co-founder NR Narayana Murthy. Azim Premji, another Indian billionaire worth around $19 billion will also add to his wealth, having recently jumped on the blockchain bandwagon with his technology solutions firm Wipro.
Predictions for the future of Asia’s billionaire wealth are bittersweet. On the one hand, the total billionaire wealth in Asia grew by an impressive 31% in 2016, from $1.5 trillion to $2 trillion. While the number of billionaires in Asia has already surpassed the number in the US, the US is home to some of the world’s wealthiest individuals, which keeps the cumulative billionaire wealth high at $2.8 trillion, up from $2.4 trillion last year. However, at current growth rates, the report’s analysis predicts that the total wealth controlled by billionaires in Asia will surpass that in the US within four years.
On the other hand, not all billionaires in Asia have managed to consolidate their wealth. A number of them control wealth of just over $1 billion, which makes them susceptible to falling out of the category at the slightest fluctuation in their respective political and economic environments, thereby denting the figures for the entire region.
