Mumbai: The total wealth held by individuals in India has grown by 11 per cent to Rs 344 lakh crore in FY17, led by strong growth in financial assets such as direct equity and mutual funds.
According to Karvy Wealth Report 2017, individual wealth in India is expected to nearly double in next five years to Rs 639 lakh crore.
The wealth held in financial assets by Indian individuals has seen a substantial rise in FY17 growing at a rate of 14.63 per cent to Rs 204 lakh crore.
This is a significant trend reversal from previous year when physical assets had an upper hand over financial assets in terms of growth rates.
Interestingly, the report noted that the risk averse individual investors are also embracing direct equity as a lucrative investment option in their bids to beat inflation and garner high return.
Measures such as demonetisation, implementation of GST, RERA and the new Insolvency and Bankruptcy Code have changed the ways of doing business in India.
This according to the study has led to more informal sectors coming under the fold of formal economy along with increasing preference for financial assets over physical assets.
“Going ahead, we expect this trend to continue over next 5 years with direct equity, mutual funds, fixed deposits, insurance and pension funds contributing a larger portion of overall asset pie. On the other hand, despite contraction of physical assets base, real estate is likely to become the most preferred physical investment option for Indians in coming years,” it said.
The report revealed that over 66 per cent of individual wealth in financial assets was held in direct equity, fixed deposits, insurance and saving bank deposits in FY17. Meanwhile, wealth in direct equity grew by 26.80 per cent in FY17 against a 13.84 per cent fall in FY16.