Minting money: Indian millionaires set to grow by 30%

In what seems a wave of optimism after the new government has been instated in India, the country is projected to see a generation of prosperity with the number of high net worth individuals to grow by a big percentage in the years to come.

This is the latest prediction by WealthInsight, a company that tracks the world’s high net worth individuals (HNWI) and wealth sector.

The intelligence firm expects Indian millionaires to grow at a strong pace, forecasting a growth rate of 34.2 per cent to reach 358,057 individuals by 2018.

Not only will there be more millionaires in the market, the amount they possess will increase by 43.7 per cent to over $2 trillion (Dh7.34trn).

These hopes are underpinned by the huge victory for The Bharatiya Janata Party (BJP) under the leadership of Narendra Modi, who was sworn in as the prime minister of the country a few days ago.

With a clear mandate to carry reforms forward, analysts see the huge potential in the newly elected prime minister to transform the demographic of India’s millionaire population.

The county is expecting Modi to revolutionise India’s prospects regarding greater job opportunities, economic growth and better infrastructure, which will increase wealth creation within India, stresses the report.

As part of Modi’s new reforms, electricity will be provided to all households and businesses. “This type of policy will create further sources of revenue throughout India, with 14.3 per cent of HNWIs earning their wealth in technology and telecommunication,” says Tom Carlisle, an analyst at WealthInsight.

“A large part of his time as country leader will be [spent] to significantly increase the level of foreign investment in banking, insurance and construction. This will create greater opportunities for wealth and increase the low GDP level that has stunted domestic investment within India”, adds Carlisle.

This optimism could be felt even before the election results were announced. For example, foreign institutional investors (FII) had already poured in over $4 billion (Dh14.7bn) in the country since the beginning of April, in anticipation of Modi’s landslide victory then.

For the first time in five years, an additional 3.85 lakh Indian investors entered the markets through mutual funds in April. This trend began even before the election result, with growing confidence that Modi would win and transform the economy.

India’s benchmark stock market index, the Sensex, was up 10 per cent last month. The most beat-up bank and infrastructure stocks have soared majorly, as was reported in the Indian media.

The country’s foreign exchange reserves rose steadily since January, and accelerated by another $11bn (Dh40.4bn) between April and May 20.

Foreigners are seen investing heavily in both equity and debt markets, giving hope to many Indians.
 

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