Millionaires in India on the rise

MUMBAI: Over the next decade, the figure of dollar millionaires in India is likely to touch 4,11,000 from a negligible number at present.

According to a report by the Economist Intelligence Unit (EIU) on behalf of Barclays Wealth, these households are estimated to be worth $1.7 trillion, or over the country’s current market capitalization of about $1.3 trillion.

But as a percentage of the population these households will comprise just 0.2 per cent. In comparison, smaller countries such as Singapore and Hong Kong will have the highest concentration of millionaires with about forty per cent of the households in each country having wealth in surplus of $1 million.

In absolute terms, however, India is expected to have one of the fastest-growing prosperous markets in the world, making it the 8th largest wealth centre by 2017. The numbers of mass affluent, with wealth over $500,000, is predicted to rise from a negligible figure in 2007 to 1.9 million by 2017.

The 5-year bull run has contributed considerably to the rising fortunes, with many corporates and entrepreneurs tapping the markets to raise funds. Inherited wealth and rising corporate salaries are also key drivers.

As in many rising markets, the wealthy in India have kept much of their wealth in tangible goods. Fresh research by McKinsey tell s that Indian households hold over half their savings in physical assets like land, houses, cattle and gold.

Property accounts for 43 per cent of overall household wealth. The yellow metal has also been a popular investment tool among Indians, who are the world’s largest consumers of gold. Recent guess suggest that the population owns two hundred billion dollar in gold, equal to nearly half of the country’s bank deposits.

But over the next decade this might change, with the increasing popularity of financial instruments like REITs and real estate mutual funds as well as gold ETFs and bullion trading platforms. Investors are likely to shift to these avenues of holding traditional assets like property and gold.

2 Comments

  1. Posted May 13, 2008 at 4:41 am | Permalink

    Real estate in India is now a safe destination for potential investors. Service apartments or Fully-furnished houses are preferred choices of long-stay executives, foreigners, Non Resident Indians and other frequent travelers to India. These properties offer all the convenience of a hotel with the privacy and comfort of home. Whether the person is a business traveler or holiday maker, looking for more than just a regular hotel room, a service apartment is the cost benefit alternative. Giving people more space, more privacy and at a cheaper rate, most of these apartments can be available either for a day or for a year.Investing in immovable property in India is no more a tough task with difficulties due to a combination of factors. A meticulous planning at the initial investment stage can make the whole process lucid. While on the road way of making investment in this growing market, people are advised to do research online on the real estate market. Extensive research ensures that the investment has been right and in time to come and will allow a good return. Foreign resident of Indian Origin can also invest in this sector. Such investors are advised to discuss the conditions governing purchase and sale of immovable property by Non-Resident Indians and persons of Indian origin before they start their investment venture.RBI grants permission to foreign citizens of Indian origin to invest in local funds in real estate on submission of necessary applications provided such investments are for use of residence.For more view- realtydigest.blogspot.com

  2. Posted May 16, 2008 at 11:24 pm | Permalink

    Yes that is true but what will be most overall probably effect on that other ?

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