MUMBAI, MAY 7: If all that’s glittering in the Indian economic scenario is indeed gold then, by 2017, the country will surpass many developed nations in terms of domestic wealth. A new household wealth index (HWI), developed by Barclays Wealth and the Economist Intelligence Unit (EIU), predicts that India will become the eighth largest wealth market in the next 10 years.

Published in a report titled Evolving Fortunes, the index predicts that the number of Indian dollar-millionaire households will increase in excess of 4 lakh in the next 10 years. The number of affluent people (individuals holding wealth over $5,00,000, or Rs 2 crore) will grow to nearly 20 lakh by 2017. The report signals the BRIC nations (India, China, Russia and Brazil) becoming the top 12 wealthiest countries in 10 years. This signals a global shift in the distribution of wealth, which will result in the terms ‘G7’ or ‘developed’ as an outmoded categorisation for wealthy economies.

The HWI predicts that India will experience one of the largest absolute increases in number of dollar millionaires over the next decade. Ahead of several developed economies — like Canada, Spain, Hong Kong, Switzerland, Italy — India will only be preceded by the US, China, Japan, UK, Germany, France and Italy in the overall wealth rankings in 2017.

Barclays Wealth CEO Satya Bansal says, “This report reflects a seismic shift in world wealth holdings, with increasing focus on emerging countries like India in the global wealth management industry.” Talking about investment preferences of the wealthy in India, the report says they hold more than half of their savings in physical assets like real estate and gold. Real estate has generated stellar returns on the back of low interest rates, strong demand and a huge influx of investment from sovereign wealth funds and west Asian investment groups, among others. According to the research, property accounts for around 43 per cent of overall household wealth.

“We are seeing a cultural change driving attitudes towards wealth in India. Composition of assets of wealthy Indians is increasingly shifting from physical assets to financial assets. We foresee a huge potential in the creation of financial assets, as real estate and gold still account for more than half of household wealth in India. With this, comes the need for increasing focus on financial risks and the tools to manage the same,” says Bansal.