India has the second highest millionaire outflow
in the world. A new report by global wealth sector information consulting
services firm New World Wealth reveals that India has seen its high net worth individuals leave the country
in droves in the last 14 years, with as many as 61,000 millionaires shifting
base over high taxes and security concerns as well as better education
opportunities for their children.
India is second only to China which witnessed
91,000 millionaires move out in the same period.
Earlier this year, another wealth report by
Knight Frank revealed that one out every four millionaires is bidding goodbye
to India.
"In the last 10 years, 27%, or 43,400
millionaires among the 1,60,600 high net worth individuals (HNWIs) in India,
have left the country for better employment opportunities in the US, UK and
Australia," noted the report, revealing a serious problem of 'wealth
flight'.
The rise of the Indian millionaires has been
impressive with the number of rich Indians rising 27% in the last year from
1,96,000 to 2,50,000. As it turns out,
however, that kind of wealth creation has not been sufficient to stem the
exodus.
The top 5 destinations for Indian millionaires
are the UK, US, Australia, UAE & Singapore, according to Andrew Amoils,
head of research, New World Wealth.
The major reasons to immigrate include turmoil in
home country, security concerns and pursuit of better education prospects for
their children. But, the biggest draws have been better standard of living
& tax savings.
"The UK, Australia & the USA appeal to
people due to language, standard of living, schooling and security. The UAE and
Singapore also have a low tax structure," says Amoils.
So it appears that those desiring a better life
for themselves and their kids are opting for countries such as the UK, US &
Australia, while others prefer tax havens such as the UAE & Singapore.
This flight of the wealthy is all the more ironic
given the government's efforts to bring home the vast amounts of wealth stashed
abroad, and promote NRI investment?
Can you bring back wealth when the rich
themselves are leaving in droves?
"There are so many reasons for leaving
India, but the most important one is a sense of security.
Safety in life, wealth, food, air, education, and
rights," said Prateek Bakshi, a banker in New York.
Despite the proliferation of malls, bars and high
end restaurants, the quality of life in India remains poor.
As Firstpost said earlier, close to 10 crore
Indians do not have access to safe sources of water, which is not surprising
because our waterways are filled with filth.
According to Central Pollution Control Board’s
(CPCB) 2011-12 annual report, about 60% of India’s water-sources (which are
routinely monitored) have poor “bio-chemical oxygen demand”, an indicator of
organic pollution, and about 68% have faecal coliform - bacteria from feces. In
terms of air quality, 79% of metropolitan cities have very high levels of
particulate matter & nitrogen dioxide, both of which are the main causes of
air pollution. The fact of the matter is that urban India is rotting and is
sinking in its own filth.
Moreover, India's uncertain tax environment
doesn't make matters any better. This year alone, the government has sent
notices for immediate payment of taxes to companies and investors.
The government is trying hard to improve India’s ranking on the World Bank’s
Ease of Doing Business index but India currently ranks 142 out of 189 countries
behind the likes of Nepal and Mozambique, and on tax issues it performs even
worse.
Last year,
Mumbai was home to the most number of billionaires, with 619 UHNWIs, who Knight
Frank describes as people worth at least $ 30 million. Delhi was a distant
second with only 157 who were as wealthy.
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