India’s Wealthiest 1% Saw Their Share Inch Back To Over 40% Of Country’s Wealth
India’s wealthiest saw their share of the country's wealth rise in 2020, even though overall wealth in India declined, showed the latest edition of the Credit Suisse Global Wealth report.
The wealth share of the top 1% went up from 39.5% in 2019 to 40.5% at the end of 2020, the report shows. Over the past two decades, the share of wealth of the wealthiest 1% has risen from 33.5% in 2000 to over 40% now.
India’s Gini coefficient, a measure of the distribution of income across the population, increased from 74.7 in 2000 to 82.0 in 2019, and reached 82.3 at the end of 2020. A higher Gini index indicates greater inequality.
Global Wealth Rises; India Lags
2020 was a year in which global wealth rose despite a pandemic which led to a contraction in economic activity. Steps taken to support the economy and financial markets, however, helped asset owners disproportionately compared to income earners.
Total global wealth grew by 7.4% and wealth per adult rose by 6% to reach another record high of $79,952, the Credit Suisse report showed. Adjusting for exchange rate changes, total wealth would have risen by 4.1% and wealth per adult by 2.7%.
Stranger still, countries most affected by the Covid-19 pandemic have often been those recording the greatest gains in wealth per adult. The contrast between what has happened to household wealth and what is happening in the wider economy can never have been more stark.Credit Suisse Global Wealth Report
Much of the gain in global wealth came from North America where wealth rose by $12.5 trillion and Europe, where it increased by $9.2 trillion.
“These two regions accounted for the bulk of the wealth gains in 2020, with China adding another $4.2 trillion and the Asia-Pacific region (excluding China and India) another $4.7 trillion,” the report said.
Wealth per adult in India fell 6.1% in 2020, while it rose 6% globally. Much of the decline for India came from non-financial assets, value of which fell 6.8%. Financial assets saw an increase of 3.8%, while debt declined 5.8%.
India continues to lag well behind China on most metrics of wealth.
At the end of 2020, wealth per adult in China was 5.4% higher than a year earlier. Gross assets per adult rose by 6.3%.
“In 2020, wealth per adult was $67,771 in China and $14,252 in India. From 2000 to 2020, it grew at an average annual rate of 14.9% in China and 8.8% in India,”the report said. “Both of these growth rates comfortably exceeded the average annual growth rate (4.8%) for the world as a whole over this period.”
1% Of Global Adults Are Dollar Millionaires
In 2020, for the first time, more than 1% of all global adults were dollar millionaires. Worldwide, there were an estimated 56.1 million millionaires at the end of 2020, up 5.2 million from a year earlier.
India once again lagged behind, with the number of millionaires falling in 2020.
An estimated 6.98 lakh Indians were dollar millionaires at the end of 2020 compared to 7.64 lakh at the end of 2019.