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Photo: Reuters
Photo: Reuters

Wealth of Indian adults rises marginally amid covid outbreak: Credit Suisse

  • Comparing this to the World Bank’s estimate of per capita income at USD 2,104 for 2019, India’s wealth per adult translates to 8.27 times it’s annual per capita income

Wealth per adult in India rose 0.6% to USD 17,420, despite covid-19 bringing economic activities across the nation to a standstill with gross domestic product (GDP) contracting 23.9% in the first quarter of the current fiscal, shows the Global Wealth Report 2020 by Credit Suisse. As per the report, wealth per adult in India stood higher at USD 17,299 as on 31 December 2019, from USD 14,569 in June 2019.

The Credit Suisse Research Institute attributed the upgrade to a change in its entire data series based on estimates from Karvy Private Wealth, an arm of the Karvy Group.

“In the past, we estimated Indian wealth figures from a limited amount of survey data. This year we had balance sheet data for financial assets for 2010-19 from what seems a reliable source: Karvy. We therefore revised the complete series for financial assets in India to align them to this data. This was the biggest change in source data for any country this time round," said Professor Anthony Shorrocks, one of the co-authors of the report in response to a query from Mint.

Comparing this to the World Bank’s estimate of per capita income at USD 2,104 for 2019, India’s wealth per adult translates to 8.27 times it’s annual per capita income. In rupee terms at today’s exchange rates, this implies wealth of 12.86 lakh per adult. The Credit Suisse Wealth report measures wealth in current and not constant prices.

The 2020 report has made similar changes to other parameters of India’s wealth. Personal debt per adult was reduced from USD 1,345 (end June 2019) to USD 1,080 (end December 2019). Population with wealth below USD 10,000 fell from 78% to 73% and the proportion of adults with wealth above USD 100,000 rose from 1.8% to 2.3%.

Putting aside the divergence between the old and new series, a look at the new series alone also reveals relatively optimistic estimates. According to Credit Suisse, financial assets of Indians in calendar year 2019 grew by 8.6%, non-financial assets grew by 12.5% and debts grew by 14.4%. This placed a growth in wealth per adult at 9.4% in calendar year 2019. According to the report non financial assets are 78% of household wealth implying a buoyant growth in the real estate market. Official data however has presented a more muted picture, pegging nominal GDP growth in FY 2019-20 at 7.2%.

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