Wealth inequality in India peaked during Covid, says report | Social Hindustan News

Wealth inequality in India peaked during Covid, says report | Social Hindustan News


NEW DELHI : The Credit Suisse Global Wealth Report released on Tuesday showed that the Gini coefficient for India hit a peak of 82.3 in 2020 and remained the same at the end of 2021.

In economics, the Gini coefficient is a measure of inequality. A higher figure denotes higher level of inequality.

Compared to other major fastest growing economies like China, Indonesia and Saudi Arabia, India’s Gini coefficient was the second highest, after Saudi Arabia at 86.4. The Gini for China and Indonesia was much lower at 70.1 and 78.2, respectively.

For India, Gini remained unchanged in 2021 from 2020 even as household wealth in India saw a sharp jump and the country added over 100,000 millionaires, indicating widening income and wealth gap.

Total wealth in India increased by $1.5 trillion or 12% in 2021, to an estimated $14.2 trillion, as per the report. Wealth per adult also saw an increase of 9% in 2021 to stand at $15,535.

 

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However, the median wealth per adult grew lower at about 7.6%.

Median is a more accurate metric over mean to determine wealth share per adult as the distribution of wealth is highly skewed.

Between 2000 and 2021, mean wealth per adult in India has risen at an average annual rate of 8.8%, whereas median wealth has grown at 5.8%.

The hike in India’s household wealth in 2021 has come after a 6.1% slump recorded in 2020.

This growth occurred on the back of a sharp rise of 31% in share prices.

The report highlighted that India’s Gini coefficient has steadily increased from 74.7 in 2000 to 82.3 in 2021.

India added 107,000 millionaires in 2021 and accounted for at least 1% of total global millionaires. “The number of millionaires in India is expected to more than double to about 1.6 million by 2026,” as per the report.

The number of Ultra High Networth Individuals (UHNWI)—with net assets over $50 million—increased by 720 in 2021 to 4,980.

The wealth share of the top 1% Indians increased by to 40.6% in 2021, having steadily risen from 33.2% in 2000. The top 10% in India held 72.5% of the country’s total wealth at the end of 2021.

Aggregate global wealth recorded a rise of 9.8% or $41.5 trillion at prevailing exchange rates to reach $463.6 trillion. If the exchange rate movements are to be set aside, aggregate global wealth grew by 12.7% in 2021, which is the fastest annual rate ever recorded.

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