Number of ultra-rich people in India is growing. A new report says that the number of ultra high net worth households (UHNHs) has gone up by 10 per cent in FY17, higher than 7 per cent growth of such households in FY16. These 160,600 ultra rich households have an accumulated net worth of Rs 153 trillion. UHNH are ones with a minimum networth of Rs 250 million, mapped over 10 years.
About 60 per cent of the ultra high net worth individuals (HNWI) surveyed, were below the age of 40, compared with 47 per cent last year.
"Top of the Pyramid 2017", a report by Kotak Wealth management says that ultra HNWIs have increased their expenditure on luxury goods with products ranging from electronics to vacations, automobiles, and home décor – and a substantial amount is being spent on apparel. In addition to spending on luxury, ultra HNWIs have also increased their spending towards philanthropic causes and their personal well being.
Ultra HNWIs have invested a significant 13 per cent of their income for growing personal wealth, mainly to capitalise on the growth in the Indian equity markets. Apparel and accessories commanded the largest share of expenses followed by holidays. Indian ultra HNWIs spent (average) more on travel and vacations to foreign countries than any other nationality. Key drivers for luxury vacations include taking time out from increasingly hectic work schedules to bond with family, rejuvenation, and the desire to explore locations that provide rare, unusual, and remarkable experiences.
The share of jewellery has decreased to about 12 per cent from 17 per cent last year. Higher gold prices have contributed to a fall in demand.
Almost 80 per cent of all ultra HNWIs surveyed considered philanthropy important and about three-fourth said they included philanthropy in their annual expenditure plan. The younger generation is primarily driving a shift in attitude towards giving, with maximum 25 to 50 year olds considering philanthropy important.
"These philanthropists do not want to write a cheque and say ok – that’s that. Instead, young ultra HNWIs, many of them educated abroad, are replicating the western approach towards charity and they want to be directly involved. The new generation is more sensitive to social issues and aware of the injustice of inequality,” says the report.