The Indian economy has been declared the world’s fastest growing economy, beating China at the game. However, the wealthy population is still preferring other countries over India, and as per a fresh report, India stands third in the list of countries where HNWIs (high net worth individuals) migrate to foreign countries.
Recently, Wall Street reported that 43,400 Indian millionaires have left India in the last 10 years; whereas New World Wealth said that in the last 14 years, 61,000 Indian millionaires have migrated to foreign countries.
If this isn’t shocking, we don’t know what is!
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5000 Wealthy Indians Migrated in 2018
As per the Global Wealth Migration Review (GWMR), 2019 published by the AfrAsia Bank and research firm New World Wealth, 5000 extremely rich Indians have moved out of the country in 2018.
At the top of the list is China, with 15,000 HNWIs leaving the country which makes up 2% of the total population and next in line is Russia with 7,000 HNWIs, i.e. 6% migrating. However, 10% of the wealthy population of Turkey moved to other countries, but the number is only as much as 4000.
There are numerous reasons cited behind this massive exodus some of which are the safety of women and children, pollution, climate, space, financial issues, educational systems, career opportunities, ill-practices of the Government, and many more.
How Will This Affect The Indian Economy?
Here are three ways in which the wealthier population of India leaving their motherland will affect India:
A Dent in The Economy
The primary reason behind the super rich leaving the country is increased business opportunities. Once they find a better environment for their business in foreign countries, employment is offered to the locals, which results in poorer employment rate in India and lesser job opportunities.
With employment rates in India being poor already, rich population choosing to set up their businesses elsewhere will bring it all the more down. There is a huge gap in the rich and poor population of India already, and reduced employment rates will result in the gap widening some more.
Problematic Tax System Of India
Another reason why rich people move abroad is the taxation system here. The tax system in India is definitely problematic, for the lack of a better word. When wealthy people set up their businesses in other countries, they find a way to evade paying taxes in India, which, again is a huge blow to the economy of the country.
Countries like Singapore, Hong Kong, UK, Korea have simpler tax systems and many startups choose to base their headquarters in such countries and pay taxes there to avoid the complex tax structure of India. A fine example would be Flipkart, which registered their company in Singapore, to save taxes imposed by India.
India’s Rank on the World Bank’s Ease of Doing Business
The Government is striving to boost India’s rank in the World Bank’s Ease of Doing Business index. This index is a list wherein economies around the world are ranked as per the ease of doing business they offer. The higher up the country is on the list, the greater is the environment for doing business.
However, if multi-millionaire people take their businesses elsewhere, this ranking will definitely suffer. As per 2018, India wasn’t in the top 50 countries in the World Bank’s Ease of Doing Business, and will probably go down if the wealthy people move their businesses in foreign countries.
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