Country’s individual wealth falling in dollar terms: Credit Suisse

According to a new Credit Suisse report, the average wealth of an Indian individual has witnessed a decline since 2010. But that’s only in dollar terms; based on average exchange rates for the years concerned, there’s been a steady rise in individual wealth in the country in rupee terms.

According to the report, until the global financial crisis, wealth rose strongly in US dollar terms, from $2,040 a person (approximately ₹91,677, based on the average exchange rate against the dollar) in 2000 to $5,100 (₹2.1 lakh) in 2007. Subsequently, after falling 25 per cent in 2005, it rebounded to touch $5,400 (₹2.4 lakh) in 2010.

In the next year, however, it again fell 13 per cent due to adverse exchange rate movements. The wealth per adult in India has not regained its previous peak since then, eroded by depreciation of rupee, and was just $4,650 per person in mid-2014. In rupee terms, however, that’s one of the highest levels seen of ₹2.8 lakh.

While wealth has been rising strongly in India and the ranks of the middle class and wealthy have been swelling, a large proportion of the population - around 95 per cent - has a net worth of less than $10,000 (₹6.1 lakh). And at the other end of the scale, just 0.3 per cent of the population has a net worth of more than $1 lakh (₹60.7 lakh). In numerical terms, this translates into 24 lakh people. In the global wealth stakes, India has 2.38 lakh members in the top 1 per cent of global wealth holders, translating into a 0.5 per cent share of the world’s super wealthy. The report estimates that 1,000 adults have wealth over $50 million and 650 people own more than $100 million.

The report suggests that household wealth in India is heavily skewed toward property and other physical assets, which make up approximately 86 per cent of household assets.

The good news is that personal debts are only around $315 (₹19,133) a person, even after making adjustments for the significant under-reporting that Credit Suisse apprehends had an effect on the household survey used to estimate personal debts in India.