Opinions

Fret not about high net-worth individuals turning NRIs


A study, Henley Private Wealth Migration Report 2023, reckons India is likely to see at least 6,500 high net-worth individuals (HNWI) – those with wealth of $1 million or more – leave the country this year. Such a lifestyle choice by millionaires can be construed as a reflection on a country’s social development, political freedoms and economic prospects. That would be overreach. The other countries most millionaires are expected to leave this year are China, Britain and Russia. The most sought-after destinations for well-heeled Indians include Australia, Singapore and Dubai, all of which have programmes offering citizenship by investment. Apart from ease of doing business and first-world standards in healthcare and education, these are proximate enough for India’s departing millionaires to manage business interests they leave behind. Taxes and capital restrictions weigh in on decisions to relocate.

Millionaires lounging at the departure gate make little difference to a country so long as it produces more of them. By some projections, India could double its 2021 population of around 8 lakh millionaires over five years. Every third new millionaire in the world between 2021 and 2026 is likely to be an Indian. Besides, 18 million Indians live outside their homeland, the world’s biggest diaspora that could make it the first country to receive $100 billion in remittances this year. The outflow on account of departing HNWIs is not significant in comparison.

The pace of wealth creation within India, and among Indians living abroad, is accelerating. The consumption pathway for this wealth is also globalising rapidly. India needs to grow at world-beating rates to be able to produce goods and services at home for a new generation of big spenders. The immediate target would be to raise living standards from lower-middle-income to upper-middle-income country levels. Structural rigidities make sustaining economic growth above 8% difficult. That growth rate is, however, inescapable if per-capita income has to double in five years.

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