India all set to lead growth of the wealthy

A new stereo-type defying wealth class, consisting of self-made professionals, corporate executives and entrepreneurs among others, has appeared on the global economic scene with little fanfare. These are the New Wealth Builders (NWBs) — households with financial assets of $100,000 to $2 million. A Citi study says, India will set the pace through 2020 in financial asset compounded annual growth rate of 47 per cent.

The country is forecast to enjoy real GDP growth of between 6 per cent and 6.7 per cent per year through 2020. The subcontinent’s high savings and investment rates, rapid workforce growth, quickly expanding middle class, and shift from low-productivity agriculture to higher-productivity manufacturing will underlie the fast growth in India’s NWB households through 2020. A favourable environment will see aggregate Indian NWB assets grow tenfold by 2020, to nearly $900 trillion, the study has predicted. NWBs were barely on the economic radar as this century began; today, however, they constitute a formidable and hardworking segment driving growth and economic expansion in vibrant communities throughout the world.

In projected average growth of NWB households through 2020, India leads with 47.4 per cent growth, followed by Indonesia (41 per cent), Vietnam (35 per cent) and Thailand (24 per cent). At the low end of the scale are Singapore (-0.3 per cent) and Argentina (-0.8 per cent). The US occupies 27th place (2 per cent), below Spain but above the UK.

“The sweeping trends of urbanisation, digitisation and globalisation are leading to an expansion of a new economy, consisting of India’s thriving start-up base and growing e-commerce industry. As this emerging base of wealth grows, the customer demands better control over their finances and time” said Kartik Kaushik, country business manager, global consumer bank, Citibank India. Citibank India on Wednesday announced the launch of a new retail-banking platform, Citi Priority, to service the growing base of the aspirational and financially progressive consumers in the country. India is the fifth country in Asia to offer Citi Priority. Since 2010, the number of households in the NWB segment has grown faster than either the high net worth or mass market segment.

kumarshankar@mydigitalfc.com

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