India’s Richest Prefer to Invest in Real Estate and Gold.

India is a nation with huge disparity in wealth accumulated by individuals. There is huge difference in investment preference of Uber Rich when compared to HNI or middle class. 

According to the report by Bernstein, 60% of India’s wealthiest citizen’s assets are parked in Real estates and Gold. This Uber Rich segment of India comprises Ultra High Net Worth Individuals (UHNI). It also includes High Net Worth Individuals (HNI) and the affluent class.

This group comprises only 1% of Indian households. However, they control 60% of the nation’s total assets. They also control 70% of financial assets.

India’s Richest Hold $11.6 Trillion in Total Wealth

India’s total household wealth is estimated at $19.6 trillion out of which $11.6 trillion or 59% percent is held by Uber Rich. Of this total, only USD 2.7 trillion is invested in financial assets as to say mutual funds, insurance, equities, bank or government deposits. This pool of capital is termed as Serviceable Addressable Market (SAM) for wealth managers. 

The main investment of the rest about $8.9 trillion is done in Non serviceable assets like physical real estate, promoter equity and cash holdings etc. 

The Ultra- Rich by The Numbers

Bernstein report highlights that India has: 

• Around 35,000 UHNI households with net worths exceeding $12 trillion
• These households have average assets of $54 million, including $24 million in financial assets.

The Disproportionate Wealth Distribution

Since the past six decades wealth concentrated in the richest 1% hands is highest. By the end of the 2023, India’s richest citizens owned 40.1% of the country’s wealth, the highest since 1961, there share of total income was 22.6%, the most since 1922.

There has been a widening gap between rich and poor with the growing rate of India’s GDP. The World Inequality Lab reported that a lack of education has pushed people into low-paid jobs. This situation has depressed the growth of the bottom 50% and middle 40% of Indians. 

Data from Forbes billionaire rankings show that the number of Indians with net wealth exceeding $1 billion increased significantly. It rose from one in 1991 to 162 in 2022.

Government’s take on the issue

The Indian government’s chief economic advisor said that providing subsidised grains to the poor has helped. Spending on their education and health is also beneficial. In addition, direct cash transfers via rural job schemes have helped in reducing income inequalities.

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