The number of dollar millionaires (net worth > INR 5 Crores or approximately USD 1.1M) is increasing at a rapid rate, and is showing the highest growth rate amongst all developing countries today.
This is the result of the Indian economy growing rapidly at a clip of > 8% annual GDP growth rate over the past few years, and the entrepreneurial flexibility of Indian businessmen and industrialists, apart from the fast-growing Indian IT/BPO sector. The fact that there are more billionaires in India than in South or North-East Asia is another indication of India’s growing economic clout. There is no Hong Kong or Mainland China billionaire in the top 10 billionaires in the world, but there are 3 Indians in that top 10 as of data from 2009-10 from the Forbes magazine research.
Of course, just having many billionaires and millionaires is nothing to be proud of, when 60% of the countrymen are living a hand to mouth existence with less than USD 2 per day. We are here talking about some 700M people. These people are characterized by the government as “BPL” folks – people who are below the poverty line.
While in the Eastern societies, wealth is revered as something sacrosanct and to be praised, in Indian society wealth is just respected and not deified. There is equanimity which exists in the people of India, which helps them to take things in their stride, rather than worry about making the next million or billion, and this concept applies all the way up to the top echelons of the society as well (including most of the millionaires we talked about earlier in this post). There is a tomorrow and it cannot be precisely predicted, and there is an “after world” which one does not know about. One can only pray for the best in this life and the next.
It is not the same philosophy elsewhere in the world. The simplistic view of the Indian world is now getting a bit damaged at the edges by materialistic influences coming from all over, especially from the West. India has always been an open society with flexibility to absorb the positive influences and ignore the negatives for a rather long time. However, now things are different, as the demographics of India is distinctly in favour of people less than 25 years old, who haven’t possibly felt the pains of their parents or the previous generations. So, now the younger generation is racing fast towards a materialistic adoption which would drive more money-making efforts and a thoughtless race towards fleeting pleasures.
So, I cannot say what would happen going forward. My worry is more about the impact that wealth is having on the rural folks, who have till now, well, remained poor. That is changing with better farm prices, improved infrastructure, access to credit, etc., While the wealth disparity is stark, the drive towards a better standard of living is going to create or is already creating issues in the country side. Society is changing, and may not always be for the better, as improvement in living standards may not be accompanied by human understanding of the needs of the poorer souls.
So, India is in transition. An economic as well as a societal transition of huge magnitudes, and in this respect is clearly comparable to China, where everything appears to be controlled and emotions are getting bottled up. May not be good for China in the medium term, forget the long term impact. It is wiser for both China and India to analyze the issues in the transformation of their respective societies and come up with social solutions for handling the wealth disparity, one of which could be equal access to wealth creation mechanisms.
Well, I can write on and on, but it is fascinating to see what is going on in India. The Westerners will do well to partake in this journey of discovery and should help India apply some of their learnings from their own societies.
24th July 2011