The Fleeing Millionaires

According to the Global Wealth Migration Review 2019 by AfrAsia Bank and research firm New World Wealth, India saw the third highest outflow of wealthy individuals in the world, with nearly 5,000 millionaires, called high-net-worth individuals (HNWIs), leaving the country, which is two per cent of the total number of HNWIs in the country. This is even faster than it is in the UK, which is embroiled in a political crisis owing to Brexit. The critical problem with the Indian economy, as the report says, is that of the degree of inequality growing at an alarming rate. The fact is that the HNWIs hold nearly half of the total wealth in the country, a pointer to the steep graph of inequality. This has a negative bearing on the good news that the country’s total wealth is set to grow at a handsome rate in the next ten years and that it will outperform the UK and Germany in terms of wealth generation to become the fourth largest wealth market in the world by 2028. True, there are good news for the cities of Delhi, Bangalore and Hyderabad with their well-diversified economy and prowess in IT skills. It is also another matter that new HNWIs are on the rise. For, as long as there is inequality and wealth is concentrated in the hands of only a few privileged ones, the graph of wealth generation will remain skewed and the much-vaunted sustainable development goals (SDGs) will remain a mirage. Here lies the unhealthy sign of an economy said to be surging ahead as one of the fastest growing economies in the world. Another big concern is whether the country can really boast of it being a business-friendly nation – in terms of the ease of doing business – given the rate of outflow of HNWIs, a people whose capacities could have been instrumental in driving the country’s economy. It is incumbent on the next government at the Centre to address the issue of HNWI outflow so that it does not end up being one of the hazards impeding the country’s growth story.