Just how many crorepatis does India have?

With our vast reservoir of black money, and absurd income tax or wealth tax filings, or, for that matter, mandatory declarations by lawmakers, nobody quite knows. But imprecise calculations point at some answers.

My basis for this is the World Wealth Report released yesterday by Capgemini and Merrill Lynch Global Wealth Management Ltd., not to mention an interesting interview in The Economic Times with a leading Swiss watchmaker who says his company sold many more than the 20 watches annually it had originally estimated and, what’s more, that the average cost of the watches sold was Rs. 20 lakh.

The Wealth Report counts 126,700 Indians (I am reasonably sure it doesn’t count nonresident Indians) who have “investible resources” of over $1 million, or about Rs. 4.50 crore. Let’s go now with our guessing game.

If somebody has Rs. 4.5 crore to merely invest, probably in the financial markets, it is reasonable to believe his total assets, including real estate, will be a factor of three. This means his net wealth is Rs. 13.5 crore, or $3 million. So, 126,700 – roughly one Indian in 10,000 – enjoys that level of wealth.

Given the normal trickle-down effect, It is reasonable to assume that four times more people would enjoy half as much as wealth. That would mean about 500,000 Indians would have nearly Rs. 7 crore each.

Taking that further:
•    2 million Indians would each have a net worth of Rs. 3.5 crore (also roughly, if you add the other richer Indians, the dollar millionaires in the country
•    16 million Indians would have a net worth of Rs. 1.75 crore
•    128 million Indians would have a net worth of Rs. 90 lakh.

Okay, the last 128 don’t qualify to be crorepatis but the others put together could be approximated to 20 million, or 2 crore. That would mean nearly 2% of our population are crorepatis, or one in every 50 Indian is a crorepati!

Now, how many people would find that surprising?