Hyderabad, September 24

Reflecting the country’s growing economic prowess, India’s wealth generation has outpaced the global average by nearly four times. The individual wealth in India now stands at Rs 73 lakh crore and it is estimated to double over the next three years to touch Rs 144 lakh crore.

This means that the quantum of wealth earned and inherited by individuals in the past 62 years of Independence India will be doubled in the next three years. In what is billed as India’s first-ever Wealth Report, Karvy Private Wealth, the wealth management arm of Hyderabad-based financial services company Karvy Group, has said the individual wealth in the country was growing at a whopping 26 per cent as against the world average of 5.6 per cent.

“The wealth of the High Net worth Individuals (HNIs) across the globe is estimated to grow from USD 39 trillion in 2009 to USD 48.5 trillion by 2013, reflecting a growth rate of 5.6 per cent. The wealth held by individuals in India will almost double over the next three years from the present Rs 73 lakh crore,” the Wealth Report-2010 said.

Analysing trends in Indian investment scenario across all available asset classes, the report predicted rise in Indian investors’ appetite for risk-taking, manifold growth in equity investments and alternate asset class investments. The study considered asset classes like equity holding, bank deposits and debts and excluded assets like real estate and gold.

It pointed out that most of the individual wealth in the country is in the form of debt assets, which account for over 65 per cent of the total wealth at Rs 48.12 lakh crore, followed by equities at Rs 24.76 lakh crore (33.9 per cent).

Insurance investments comprise 14.3 per cent of the asset class, followed by savings bank deposits 9.2 per cent, small savings 7.1 per cent, PF 3.9 per cent and mutual funds 3.8 per cent. The report said Indians are currently under-invested in alternative assets, including private equity funds, real estate, real estate funds and real estate investment trusts.

Only 0.3 per cent of the wealth of Indian HNIs is in alternative assets as compared to 7 per cent globally. The report predicted an increase in alternative asset holding to 1 per cent in the next three years.

The investment trend is expected to undergo changes over next three years. The asset distribution will be redistributed, providing greater balance between debt and equities. The equity based asset classes will form 42.9 per cent of individual wealth by 2012-13. While investments in debt would increase by 20 per cent year-on-year in volume terms, its overall proportion would reduce from the present 65 to 56 per cent during the period. The shift could be due to reasons like a promising GDP growth, better understanding of newer and better investment avenues and a large young, educated population, the report said.

Broadly, individuals would remain invested in the same debt instruments as they are currently invested in. However, growth in small savings will become limited.

The Tribune 24/09/2010