61,000 millionaires left India in the last 14 years: Why are the Richie rich fleeing the country.
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 HNWI’s (high net worth individuals) migrate to foreign countries.
More than 25,000 millionaires left India since 2014
I was recently reported by Wall Street that 43,400 super rich Indian millionaires have left India in the last 10 years in other terms you can say 61,000 Indian millionaires have migrated to foreign countries.
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.
On the number one position if list is China, with 15,000 HNWIs leaving the country which makes up 2% of the total population. India has the second highest millionaire outflow in the world and followed by Russia with 7,000 HNWIs or 6% migrating. However, 10% of the wealthy population of Turkey moved to other countries, but the number is only as much as 4000.
Analyst had done lots of research and they charted out couple of reasons behind this massive migration some of which are the safety of women and children, pollution, climate, space, financial issues, educational systems, standard of living career opportunities, ill-practices, tax system of the Government, and many more.
How Will This Affect The Indian Economy?
One of the most crucial and important reason behind the super rich people jumping the ship is due to improve and better business opportunities abroad. Once they find a better business atmosphere and flexible ecosystem in foreign countries, employment is offered to the locals, which results in poorer employment rate in India and very few job opportunities.
India if facing huge job crisis in the country and unemployment is at 60 year high, and now super rich Indians are opting to set up their businesses elsewhere will bring it all the more employment crisis. There is a big gap in the rich and poor population of India already, and reduced employment rates will result in the gap widening even further.
Complex Tax System Of India
Another important point that why rich people move abroad is the Problematic taxation system in India. The tax system in India is definitely complex and time consuming. When wealthy Indian set up their businesses in other countries, they also find a new alternative to evade paying taxes in India, which, again is a huge blow to the Indian economy.
This is a serious issue and the root cause for it is the taxation system in the country. If High Net-worth Individuals (HNIS) prefer to change their location to Dubai, London or some country which is a tax haven it is a serious cause of concern for the government . These HNIs are not just entrepreneurs but they are crucial drivers of private capital investment and if they exit it will lead to decline of private capital formation in the country. Indian economy is already witnessing a decline in private capital investment and it is public investment or spending from the government that is fueling growth. Political parties are promising a lot of welfare schemes and they would basically add to the burden of the tax payers, such exits may increase with the rise of the welfare state.
Developed Countries like Singapore, Hong Kong, United Kingdom, South Korea have simpler tax systems and many Indian startups are now moving 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 taking lots of step and initiative 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 business environment.
However, if huge number of Indian Millionaire Entrepreneurs take their businesses outside the country, this ranking will definitely go down the wire. 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 migrate their businesses in foreign countries.
Unlike most of the population, millionaires around the world may well choose where to live. They leave places where they are worst treated and go to places where they receive the best treatment. Along with them, go their skills and fortunes and also the jobs they generate.
In 2018, millionaires left Brazil, China, India, Russia, Turkey, United Kingdom, France, Saudi Arabia and Indonesia. Meanwhile, the United States, Canada, Australia, Israel, Switzerland, Greece, Portugal, Spain, New Zealand, the United Arab Emirates, Singapore and the Caribbean have welcomed them.
Amazing news coming in every day. Poor keep getting doles while income creators leave at an alarming rate. I’m sure we will be told that this is also part of a grand plan which mere mortals cannot fathom right now. I guess we should all pray for ‘divine intervention’.
It doesn’t matter how many left. History and destiny of a civilization isn’t decided by herds of rich (or poor) that left searching for greener pastures elsewhere by their own free will.
Future of a civilization is written by people who persisted, stayed back and did something to improve it against all odds.