India's minting millionaires: Report

New Delhi: India has all the reasons to feel like million bucks and flash a million-dollar smile.

After all, India has more millionaires than ever. The millionaire club grew by a dramatic 19.3 per cent in 2005, second only to South Korea’s 21.3 per cent on world charts.

According to the 10th annual World Wealth Report by investment group Merrill Lynch and consultancy Capgemini, the rate at which India is producing rich people is hardly surprising.

"According to the most recent Goldman Sachs projections, India has the potential to become the fourth largest economy by 2025 and the third largest by 2050, behind only the United States and China," the report says

The report also stated that India, along with Brazil and Russia, housed the top 10 fastest-growing population of high-net-worth individuals (HNWIs) - those with assets of $1 million, excluding their primary residence.

"The HNWI population grew most dramatically in South Korea, rising by 21.3 per cent; India rising by 19.3 per cent; Russia where it rose 17.4 per cent and South Africa where it grew by 15.93 per cent," the report said.

The number of millionaires in the world has nearly doubled in the last decade, from 4.5 million in 1996 to 8.7 million in 2006, and their total wealth doubled from $ 16.6 trillion to $33.3 trillion and Asia Pacific surpassed Europe to become the second most popular region for international investment.

"The BRIC nations of Brazil, Russia, India and China remained strong economic players in the competitive global arena, with three of the four represented in the top 10 fastest-growing HNWI populations in 2005," it said.

On the top of the charts was the US with a millionaire population of 2.67 million, nearly a third of the global millionaire population. Germany, the UK, China, Canada, Australia, Brazil, and Russia, among others, each have more than 100,000 millionaires.

The report suggested that the super rich are starting to move their money out of the US, an increasing number transferring their assets to emerging markets in Asia-Pacific and Latin America.

REGION-WISE BREAKUP

Asia-Pacific: India, China hand-in-hand

China, growing at 9.5 per cent, drove economies across the Asia-Pacific region, with Australia, Taiwan, South Korea, Malaysia, Singapore and Japan all benefiting.

If China's growth slows as expected in 2005, its neighbours are likely to feel the pinch. One exception is India, the region's other 2004 success story.

North America: Sunset boulevard...

Low and stable interest rates throughout 2004 drove spending on fixed investments, which doubled from 2003.

HNWIs continued to benefit from tax reform, with protection from estate taxes steadily rising through the end of the decade, before "sunsetting" by the end of 2010.

Europe: Slow, not steady

Europe's HNWIs grew at a far slower rate as a result of the slow GDP growth of its largest economies: France, Germany and Italy along with high unemployment and tax burdens in the region.

In contrast, HNWI population growth in the United Kingdom and Spain, at 8.9 per cent and 8.7 per cent, respectively, appears to be significant and follows 2003 performance where these economies also outperformed the rest of Europe.

Latin America: Go Brazil!

HNWIs grew by 6.3 per cent in 2004, substantially higher than the 1.3 per cent rate of 2003. Nevertheless, wealth remained highly concentrated.

Brazil, accounting for roughly one-third of South American GDP, continued to dominate South America's economic landscape. There, government fiscal and monetary policies helped drive growth.

Middle East and Africa: Oil's well!

The HNWI population in the Middle East and Africa (primarily South Africa) grew by 9.5 per cent and 13.7 per cent respectively, well ahead of 2003.

Oil and commodities drove dramatic gains in stocks trading in the United Arab Emirates and Johannesburg.

(Source: www.ml.com)

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