Where are India’s missing millionaires? A large number of rich people do not agree with the data of income and expenses

In a time of rising billionaire wealth and ever-increasing numbers of dollar millionaires, an unavoidable question is how reliable are the figures released annually by data compilers such as Credit Suisse, Hurun Rich List and Forbes regarding the count of the wealthy? , and the extent of his wealth. In his remarkable book, putin peopleCatherine Belton says that seven or eight oligarchs at one stage controlled roughly half of Russia’s gross domestic product (GDP). Such dominance by a narrow circle around the ruler of the country is rare. In India, however, there is more and more talk of the two ‘A’s, as they have been called. Their wealth, currently estimated at $90 billion each, is multiples of what any Russian oligarch ever had. Mikhail Khodorkovsky, before he was jailed, had a fortune of just $15 billion, and today’s richest Russian is said to have $30 billion.

However, no one would claim for the two ‘A’s the kind of control and dominance that Russia’s oligarchs once had, virtually determining who would rule their country. India as a whole is said to have 140 dollar billionaires (a slightly higher number than Russia). According to Credit Suisse, there were 764,000 dollar millionaires in India in 2019, that is, those with wealth of ~7.5 crore rupees and above. That was about two and a half times the figure for Russia, but India is now the much larger economy with a longer history of private enterprise. In a list of countries of the richest people, India was ranked 14th — not unreasonable for the world’s sixth-largest economy. But as the country has no wealth or inheritance tax, there is no official data to look for confirmation.

What the country does have is income data. And in the same 2019, all 3,16,000 people filed tax returns declaring income of more than $70,000 (or ~50 lakh). The mismatch between the wealth and income figures is evident. Large-scale income tax evasion may still be taking place, or there may be significant underreporting. In addition, capital gains tax rules allow for inflation, and therefore the income reported for tax purposes may be only a portion of the actual income earned.


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The numbers might add up better if one treated physical and financial wealth separately, instead of smacking them like Credit Suisse and Hurun do. In general, real estate accounts for about half of total wealth; in the lower rungs of the wealthy, it could be as high as 75 percent. For a true measure of deployable wealth, the value of primary residences (which do not generate income and have no immediate business value) should be taken out. Given the large share of real estate in total wealth, excluding primary residences would drastically reduce the number of millionaires and make it much less impressive.

How big is the real estate pie? Again, there is no central data point, but checks with industry firms suggest annual purchases and bookings of fewer than 3,000 residential properties having an individual value of ~5 crore rupees and above. Even if the unit value bar were lowered a bit, the number of transactions would still be decidedly modest relative to the number of reported millionaires. This also suggests that dollar millionaire counts should be treated with caution.

Another control, also on the expense side, is through the sale of high-value automobiles. Sales of the top three German luxury carmakers peaked at 32,500 in 2017 and have been declining ever since. In 2021, there were only 22,500, affected in part by covid and then by chip shortages. Taking that into account, and adding the numbers from Jaguar-Land Rover and high-end Japanese models like the Lexus, the total is unlikely to exceed 40,000. The mismatch with the reported number of dollar millionaires is obvious.

Of course, there will be wealthy people outside of these networks and millionaires with modest lifestyles. For example, a substantial percentage of the 4,800 people elected to parliament and state legislatures appear to be dollar millionaires, considering current asset values. But the Pete Seeger-esque question does arise: Where have all the millionaires gone?

(By special arrangement with Business Standard)


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