We all know equities are a volatile asset class. Particularly, over the past year, the trading floor has not been for the faint-hearted. From an all-time high of 40,268, post elections in June, the Sensex fell nearly 10% as foreign portfolio investors turned sellers after the finance minister introduced higher tax rates amid worries of an economic slowdown.
The sentiment improved in September, when the government slashed the corporate tax rate from 34.94% to 25.17% — the Sensex soared by 5%, its biggest decadal, single-day gain. It seems to have been a sugar high because, FY20 again looks gloomy. Everyone including the central bank, institutions and rating agencies are downgrading GDP growth estimates to 5.5-6.1%. However, the market remains buoyant, trusting that the reform process will continue and lower tax rates will lead to higher earnings.
While the lesser mortals were tossed about in the last fiscal’s storm, the rich only got richer. According to the IIFL Wealth-Hurun Rich List 2019, the number of Indians with a net worth of ₹10 billion has grown to 953 this year from 831 in 2018. The combined wealth of the top 25 was equal to 10% of the GDP, and the combined wealth of the entire list was more than one-fourth of the country’s GDP. According to Credit Suisse’s Global Wealth Report 2019, the number of dollar millionaires in India has increased from 34,000 in 2010 to 759,000 in 2019. Ka-ching! If you are feeling a little left out, you are not alone. According to the same report, only 1.8% of the population has a net worth of $100,000, whereas 78% has wealth below $10,000.
This story is from the November 22, 2019 edition of Outlook Business.
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This story is from the November 22, 2019 edition of Outlook Business.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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