India figures low in the distribution of global household wealth but it is fast catching up with other developing countries. This is one of the key findings of a report prepared for the United Nations by the Helsinki-based World Institute for Development Economics Research.
The average wealth in India in 2000 was $1,100 per person as compared to $1400 in and $1465 in Zimbabwe.
The authors of the report, the most comprehensive study done so far on personal assets, noted: “In global distribution, China and India owe their lower positions to the size of their population. Neither country has enough people in the global top five per cent in 2000. The two countries are expected to be under-represented in the upper tail because of their relatively low mean wealth.”
The report notes that “the representation of both China and India has been rising in the Forbes list of billionaires”. James Davies, professor of economics at the University of Western Ontario and one of the authors of the report, said these were hopeful signs that China and India, which are developing rapidly, were gaining wealth.
The study found that India and Indonesia, two low-income countries, have a particularly high share of non-financial wealth -- “this is no surprise since assets such as housing, land and agricultural effects and consumer durables are particularly important in many developing countries.”
“Financial markets are often poorly developed. In India, the only low or middle income country for which there are some details of financial assets, most of the financial asset owned by households are liquid. The ratio of liabilities to total assets is particularly low in India. A poorly developed financial markets explain this phenomenon,” the report said.