Twenty-five of the richest Indians hold wealth which is equivalent to a tenth of the country’s gross domestic product (GDP). The richest in the list includes Mukesh Ambani, S P Hinduja and family, Azim Premji, L N Mittal and Gautam Adani, including their respective family holdings. The numbers are based on the IIFL Wealth Hurun India Rich List 2019 released on Wednesday.
The report identified 953 names, which meet their minimum net worth criteria of Rs 1,000 crore. The average person on the list is 60 years old with a net worth of Rs 5,278 crore. Fifty-three per cent of the total wealth on the list is inherited.
In comparison, the National Sample Survey Office (NSSO) numbers peg the average rural household assets at around Rs 10 lakh. The average urban household’s assets are around Rs 23 lakh, according to the
2013 Household Assets and Liabilities report. The increasing income gap is a key concern among the wealthy, according to Yatin Shah, co-founder and executive director, IIFL Wealth Management. He believes that equality of opportunities has seen an improvement.
“Increasingly, more and more people are getting a chance to become an entrepreneur. They are backed by institutional capital. The opportunity is available to many more. I think we are still far away from seeing some social unrest because of the income gap,” he said. Five of the fastest wealth creators on the list are from start-ups which have reached a billion-dollar valuation, the so-called unicorns. The overall list includes names from 41 industries in total.
Shah believes that estate duty is likely to come in as economies transform from developing to developed, in response to a question on the matter. There are challenges that may need to be looked at before such a tax can come in. For example, he pointed out that 90 per cent of India’s net worth is illiquid and locked-in in the form of business and real estate assets. It is easier to collect an estate duty on liquid assets. Global solutions to address such problems include insurance and bank loans against business. He added that an inheritance tax is still four-five years away.
Anas Rahman Junaid, managing director and chief researcher, Hurun Report India, suggested that one should not see the rise in GDP as resulting in the creation of billionaires. It is the billionaires who have driven GDP growth.
“In my perspective, wealth creation is fantastic, and when it is done transparently, it deserves a lot of respect because it has a lot of positive impacts on the overall economy,” he said.
Notable mentions in the top 10 include Gautam Adani and family, whose wealth rose 33 per cent to Rs 94, 500 crore, according to the report. This catapulted him to the top five. Meanwhile, Dilip Shanghvi, once India’s richest man, saw a 20 per cent decline in his wealth to Rs 71,500 crore.
A quarter in the list (246) lives in Mumbai. New Delhi is second with 175. Bengaluru is third with 77. Smaller cities, including Bikaner, Indore and Chandigarh have one entry each. Rajnandgaon has two entries while Kozhikode has three.
The top three cities have seen their share in new additions to the rich list fall from 59 per cent last year to 36 per cent in 2019.