The pyramid of wealth of India will be severely damaged

India’s upper-middle class has played a major role in attracting foreign investment, but how big are our well-to-do peers at the top of our socio-economic pyramid? Wealth data are more difficult to obtain and verify than income statistics, so any stratification taken from a survey-based study would provoke a higher level of interest. The latest predictions we have are from the Hurun India Wealth Report 2020, which provides a well-crafted view of the country’s prosperity and fine heels. Above are the homes of dollar billionaires, of which we now have 200, according to Hurun. The next bracket is placed on those who have wealth 1,000 crore or more, there are about 3,000 households. Then we have at least the ‘international’ ultra high net worth individuals (UHNIs) of the report with ‘household’ wealth 200 crores, of which 13,000, followed by 23,000 UHNIs with wealth 100 crores. Regular HNIs, or have 10 crores and more, add 294,000 households, but at least the number of ‘affluent’ or dollar-millionaire households 7 crores, at 412,000. Below them is a strata, Hurun with the words ‘new middle class’, earning 633,000 households each year 50 lakhs or more but not enough wealth to reduce wealth. The general middle class, under this classification, consists of Indian households earning more than 2.5 lakhs per annum but not eligible for other slabs. We have 56.4 million such homes.

The most important aspect of this pyramid is how seriously it takes towards its peak. Wide variations in lifestyle are under general scrutiny, but Hurun’s report also highlights significant differences in the investment perspectives of different categories. Business owners — be they billionaires, UHNIs or the wealthy — invest most of their money in business expansion. The thing that identifies our high brackets is that, in general, most of their wealth is in the form of equity stock. For salaried households, even those with fat pay packets, home ownership is a very big deal as far as ‘assets’ go, share purchases are mostly secondary occupations. The property is particularly favored by our ‘new middle class’, which is considered a flexible key provider as long as it is a prominent symbol of status. All in all, a classic divergence report confirms that for most of us who work for money and for the few who make money for themselves.

With five members per household, Hurun reported that the wealthy or middle class had about 288 million Indians. This is enough to tame our consumer economy, we have about a billion citizens at the gross base of our pyramid that will have to move forward over the next few decades. If they suffer from stagnation, our economy risks slipping into a ‘middle-income trap’ at some point, which will have a slowdown, as their consumer flag is relatively satisfied (as a ratio of revenues) and domestic markets for products and services run into early maturity. Recent solutions of the policy include a breakthrough for basic things such as sanitation rather than electricity, water and gas supply. Also, internet coverage. Is good. However, all we need in this decade is dramatic education and health care. Telecom connectivity can allow online learning at a level never seen in any other country. But a health insurance plan for our people does not replace the need for actual medical care on earth. Let’s double down on this and make it the lasting legacy of our Kovid crisis.

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