2014 study labels India an ‘Emerging Wealth’, stark rich-poor divide still remains

2014 study labels India an ‘Emerging Wealth’, stark rich-poor divide still remains
2014 study labels India an ‘Emerging Wealth’, stark rich-poor divide still remains
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The News Minute | November 26, 2014 | 01.19 pm IST

She’s the fastest growing economy in the world and her growth measured in domestic terms since 2000 has witnessed mercurial growth.

The Credit Suisse Global Wealth report 2014 has labelled India an ‘Emerging Wealth’ based on a steep incline in prosperity displayed by the 1.2 billion population strong country. Wealth per adult was shown to have grown quite steadily with an average 8 per cent annual increase from 2000 to present 2014.

The report also highlights the vast disparity between India’s rich and poor despite the country’s apparent prosperity. Even though growth has been tremendous, figures showed that while 95 per cent of the population had wealth below $10,000, only a miniscule proportion (0.3 per cent) could boast of wealth exceeding $100,000.

According to the report, wealth per adult has crossed USD 5000 only twice before, once in 2007 when it peaked at USD 5100 and USD 5400 in 2010. In the mid 2014, the rupee had continued to depreciate and the wealth per adult has not regained its previous peak and was recorded at USD 4650. (figure below)

Image Courtesy: Credit Suisse

India has 238,000 members belonging to the top 1% of global wealth holders, which is roughly equivalent to Manipur’s population and equates to a 0.5% share. 

The report estimates that 1,000 adults have wealth over USD 50 million and 650 people own more than USD 100 million. 

On the contrary a report in the TOI from August 2014 which took data from the wealth index by New World Wealth, suggests that India was ranked 8th in the global list of multi-millionaires above Russia and is home to 14,800 multi-millionaires. The city of Mumbai alone housed 2700 multi-millionaires as its residents. (Wealth Index by New World Wealth categorizes a multi-millionaire to be an individual with net assets of at least $10 million)

Image Courtesy: Credit Suisse

Wealth is considered to be one of the key components that helps determine source of finance for future consumption, especially in retirement, it helps reduce collateral damage during long strings of unemployment, ill health or natural disasters.

According to the Wealth Report 2014, this is where India stands in comparison to other nations.

Image Courtesy: Credit Suisse

The great divide

India has a heavy concentration of citizens in the lower wealth strata and showcases extreme wealth inequality and immense population. This helps India to have a significant number of people in top wealth bracket.

On the contrary neighbouring nation, China which accounts for the largest part of newly created wealth amongst emerging markets, has few members at the top and bottom of the global wealth pool. The upper middle section in China dominates and accounts for 40% of the worldwide membership.

Wealth varies greatly across individuals belonging to different countries and according to the report the lower bottom of the global population collectively owns less 1% of global wealth, while the richest 10% of adults own 87% of all wealth and the top 1% account for almost half of all assets in the world.

The report also says that this is expected to change if a sufficient number of low-wealth countries experience rapid growth and China and India become major catalysts of global change.

Previously, another report by Oxfam before the World Economic Forum in early 2014 also claimed that the richet 85 people across the globe shared a total wealth of £1tn, which was as much as that onwened by 3.5 billion of the world’s population.

The study, however, was not too encouraging in regard of some countries like Russia showing ‘little sign of growth’ and France facing ‘uncertain prospects’ post the Euro crisis.

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