Of the 68 billionaires in India, at least 30 reside in Mumbai, making India’s financial capital 26th on the list of 100 global cities surveyed in the Knight Frank Wealth Report 2015.
While in the next 10 years only USA, China and Russia are predicted to have more billionaires than India, what’s more worrying is that India’s rich (those with investible wealth of more than $1 million) are gradually fleeing the country.
The paradox is this: can the government get back wealth stashed abroad, when the wealthy themselves are seeking to move out? Can you bring back wealth without trying to keep the wealthy back here?
In the last 10 years, 27 percent, or 43,400 millionaires among the 160,600 high net worth individuals (HNWIs) in India, have left the country for better employment opportunities in the US, UK and Australia. This is second only to China, with tops the wealth-exporting nations. Approximately 76,200 Chinese millionaires emigrated or acquired alternative citizenship over the 10 years to 2013, showed data from the Knight Frank report. The most popular destination for China’s escaping super-rich was Australia, where the Chinese accounted for more than 90 percent of applications for the country’s significant investor visa scheme over the past two years.
France ranked third, losing 31,700, or 13 percent of its total.
But what’s interesting is that as a percentage of its millionaire population, India even beats China at this wealth emigration game. ( See the Knight Frank table below)
Spirce: Knight Frank India
And where is all this HNWI exodus going to? UK, Singapore, US, Canada, Hong Kong, Australia and UAE as restrictions on Confidentiality rules in Switzerland have removed some options for the mobile wealthy. A number of HNWIs who had been earlier domiciled in Switzerland for tax purposes have relocated to Singapore, the UK or the UAE.
While UK gained 114,100 millionaires between 2003 and 2013, Singapore gained 45,000 and the US gained 42,400, representing 1 percent of its millionaires.
Data from the UK Home Statistics Office revealed that as of September 2014, 52 Indian millionaires moved to the country between 2008 and 2014 under a visa category targeted at ‘high net worth individuals’ who bring major investments that allow them to gain permanent residence here on a fast-track basis.
Source:Knight Frank India
So even though the ultra HNWI population in India (people with a net-worth of $30 million or more) has seen an increase of 166 percent over the last 10 years, this ‘money drain’ is something to ponder over amidst the government’s relentless drive to bring back India’s black money stashed abroad.
The more important question is this: can the fight against Indians who stash wealth abroad be fought effectively if more Indians with high wealth cease being Indian citizens? Wealth fleeing is one thing; the wealthy fleeing tells us that something does not quite work for wealth creators in India. It is time we pondered why the wealthy are fleeing India.
More important: the destinations wealthy Indians are fleeing to – US, UK, etc – are not tax havens. So why are the wealthy happier there than here?
Mar 11, 2015 14:04:03 IST
Categories: Black economy