Reforms help super rich get even richer in India

The government’s policies and reforms saw an increase this year in the number of ultra high net individuals (UHNIs) grow seven per cent to approximately 1,46,600 in FY16, a compounded annual growth rate of 16 per cent over the previous five years. The total net worth of these individuals is '135,00,000 crore, a growth of 5 per cent over last year and 18 per cent compounded growth over the last five years. Emerging cities and small towns non-metro cities such as Bengaluru, Ahmedabad, Pune, Hyderabad, Nagpur, and Ludhiana contribute 45 per cent to the Indian ultra-HNI population besides the top-four metro cities according to the “Optimism Uninterrupted” report by Kotak Wealth Management (KWM). The report forecasts further wealth creation in the country with the number of UHNIs is estimated to increase to 2,94,000 by FY 2021 with a combine net worth of Rs 319,00,000 crore.

Dipak Gupta, joint MD, Kotak Mahindra Bank, said, “For UHNIs, last year’s positivity of 2915 flowed through into this year with reforms taking root, inflation under control, and economic growth looking up.”

Ernst & Young said “Overall, the investment mood has remained positive. The rate cuts have led to fall in lending rates resulting in improved ultra HNI sentiment and increased investments into primary businesses. The report was prepared through interactions with over 225 ultra HNIs across twelve Indian cities.

The report which offers insights on earning, spending and investing patterns of India’s UHNIs who are getting younger (half are below 40 years) reveals that the status symbols for 81 per cent of them was wearable devices such as smart watches, fitness bands, virtual reality headsets, etc. and almost 57 per cent of them have incorporated them as part of their lifestyle. Nearly 98 per cent of UHNIs believe that succession planning is a continuous and proactive process and often choose children and high potential family members as the pool of potential successors. Wills are the most common instrument of choice and most visit their succession plan at least once in five years.