India's high net worth individual (HNI) population fell by 31.6 per cent to 84,000 in 2008, on the back of a drop in the pace of economic growth and erosion in market capitalisation, according to Asia-Pacific Wealth Report of Merrill Lynch Wealth Management and Capgemini.
This is the second largest drop in the world. In 2007, India had posted 22.7 per cent growth, the fastest in that year.
The report defines HNIs as individuals with investable assets more than $1 million excluding primary residence, collectibles, consumables and consumer durables.
According to Salil Parekh, CEO (Financial Services), India and Asia-Pacific, Capgemini, following the 2007 accelerated growth phase, India saw a reversal in the rising HNI growth trend with the key drivers of wealth including GDP and market capitalisation being hit hard by the global financial crisis. The double whammy of drop in GDP growth and market capitalisation caused an erosion of massive amount of HNI wealth in 2008 he added.
The financial crisis has dealt a blow to the wealth of HNIs in India, but the high pace of economic growth offers them a chance to increase their wealth. As a matter of fact, the ranks are expected to swell over the next 10 years with India accounting for 250,000 people in the HNI club by 2018.
According the report, the Indian HNI club is expected to swell to more than three times its size in 2008 with emergent wealth driving the growth, the report says.