The colour of money

Mumbai, May 7: India is poised to become the eighth largest wealth centre in the world by 2017, according to a household wealth report by Barclays Wealth and the Economist Intelligence Unit.

The report said the country’s high net worth individual (HNI) base would go up to over 4.11 lakh — with an aggregate wealth of $1.7 trillion — within the next 10 years.

India, which ranked 14th in 2007 with an HNI base of just below 1 lakh, will race ahead of developed economies such as Canada, Spain, Australia, Switzerland and South Korea in overall household wealth by 2017.

The household wealth index developed by Barclays Wealth projected that India would experience one of the highest additions in absolute terms in the number of dollar-denominated millionaires over the next decade.

At present, about 60 per cent of the wealth of India’s affluent population are invested in physical assets such as real estate and gold, while about 30 per cent are allocated towards financial assets such as equities, bonds, mutual funds and private equity.

Investments in properties account for about 43 per cent of overall household wealth in the country. However, as the composition of assets is shifting from physical to financial, the trend is likely to change by 2017.

The report stated that the number of households with wealth of more than $500,000 would grow to 1.9 million during the decade.

However, such surging numbers notwithstanding, India will still be placed much behind the US and other developed countries in terms of the number of high net worth households and the percentage of population under the high net worth category.

The study suggested that the aggregate wealth of high net worth households, each with assets over $1 million, would grow to about $84 trillion in the US by 2017, and the country would continue to retain the apex position in the future. “The developed nations had started their wealth creation long back, while the story in India has just begun,” said Satya Bansal, CEO of Barclays Wealth India.