Number of billionaires in India increases when the world sees decline

By Dr Santosh Kumar Mohapatra*

According to Billionaires’ lists (2023) of Forbes Magazine published on April 5, 2023, India has more billionaires than ever before but they’ve had billions clipped off their wealth in the last year due to maelstrom in stock market

Forbes of the bible of wealth measurement, said in its 37th report that the total number of billionaires in world on this year’s list fell to 2,640 (down from 2,668 in 2022; 2755 in 2021), marking the second-straight year of decline.

Collectively, their net worth/wealth has declined from record $13.1 trillion on the 2021 list to $12.7 trillion in 2022, and further to $12.2 trillion in 2023 –as turbulent times have hit both public and private markets. However, it was a good year for 150 fresh faces who made it to the billionaires list for the first time in 2023. The 25 richest people in the world are worth a collective $2.1 trillion, according to Forbes’ World’s Billionaires list,–down a combined $200 billion from $2.3 trillion in 2022.

One person dropped out of the billionaires’ club by choice: Yvon Chouinard, who founded outdoor clothing and gear maker Patagonia in 1973–and donated it to a trust and a non-profit fighting environmental crises in September 2022, thus removing himself from the wealth rankings he had long criticized.

No one had a better year than Bernard Arnault, who is No. 1 on the World’s Billionaires list for the first time. Record sales and profits have driven shares of his luxury goods leviathan LVMH–which owns brands such as Louis Vuitton, Christian Dior and Tiffany–to new heights. Arnault, who is worth an estimated $211 billion, added $53 billion to his fortune over the past year on the back of an 18 percent jump in LVMH stock, giving him a bigger gain than any other billionaire on the planet. This is the first time a French citizen has led the World’s Billionaires ranking, which began in 1987.

Elon Musk, who held the top spot last year, has slipped to No. 2 spot. Shares of his electric carmaker Tesla fell by nearly 50 percent following the April 2022 announcement of his $44 billion takeover of Twitter, partly due to investor fears about Musk adding yet another CEO job to his workload and concerns about the $23 billion of Tesla stock he sold to help finance the deal. Even with his private spaceflight firm SpaceX soaring to new valuation heights, Musk is still worth $39 billion less than a year ago.

Musk’s loss in wealth is second only to that of Amazon founder Jeff Bezos, who’s the world’s third-richest person, worth $114 billion. He’s $57 billion poorer than in 2022 thanks to a 38 percent decline in the e-commerce giant’s stock. Larry Ellison (net worth: $107 billion), co-founder of software giant Oracle, takes the No 4. spot. Investment legend Warren Buffett ($106 billion) comes in at No. 5 worldwide.

When the number of billionaires in the world has declined consecutively for two years, the same has increased in India. The number of billionaires in India has increased from 102 in 2020 to 142 in 2021 and further to 166 in 2022 and finally 169 in 2023 list. This makes India a wealth superpower in third position. But it’s GDP is less than combined wealth of top two billionaires of world. We have more billionaires than every other country apart from China which has 495 billionaires and the US which has 735.

However, while the number of billionaires rose, their combined wealth faced a reality check, dropping 10 percent to $675 billion, down from $750 billion on the 2022 list. This is mainly due to decline of wealth of Gautam Adani due to stock bloodbath triggered by Hindenburg Research report.

Adani, who briefly became the world’s second richest person last September 2022 and was the world’s third richest person for most of January 2023, slipped to number 24 globally. India’s biggest loser, of course, is industrialist Gautam Adani who was worth $90 billion in the 2022 Rich List. He then rose to a peak of $145 billion but his fortune is now down to $47.2 billion in the wake of the blistering Hindenburg Research report.

He has strongly denied the US hedge fund’s allegations that his namesake corporate empire engaged in “brazen” accounting fraud and share price manipulation. Gautam’s brother Vinod Adani, who’s reckoned to be worth $9.8 billion, also makes it to 184th position in the global rich list. He’s not included in the India list as he’s a citizen of Cyprus.

India and Asia’s richest man is Mukesh Ambani, a familiar figure on the wealth charts. Ambani is now worth a hefty $83.4 billion but even that is down by eight per cent from $90.7 billion in last year’s Rich List. Ambani is now the ninth-richest person in the world .The total wealth of India’s billionaires, though, has fallen 10 per cent from an astronomical $750 billion to $675 billion and that’s largely because of Adani’s crashing fortunes

Adani is still India’s second-richest man by a long stretch and he’s followed by tech giant Shiv Nadar who is worth $25.6 billion, which is down 11 per cent from a year ago. In fourth position is vaccine king Cyrus Poonawalla who’s worth $22.6 billion – though he’s also down by 7 per cent from his peak when the Covid-19 pandemic was still boosting demand for his products.

Steel baron Lakshmi Mittal, who’s UK-based but still holds an Indian passport and so qualifies to be on the richest Indians’ list, comes in at fifth position, worth $17.7 billion. Mittal used to be the UK’s wealthiest man but his sprawling steel empire has produced mixed results in recent years. His once highly profitable Ukraine plant is near the frontline in the Russia-Ukraine war.

Other familiar names in India’s Top Ten Richest include pharmaceutical billionaire Dilip Shangvi ($15.6 billion), retail star Ramakrishna Damani (15.3 billion), industrialist Kumar Mangalam Birla ($14.2 billion) and banker Uday Kotak ($12.9 billion). Shangvi is the only one of them who’s wealth is unchanged. All the others have moved downward, even if only by not huge amounts.

At a lower level in the billionaire charts there’s one-time banker Falguni Nayar who retains the title as India’s richest self-made woman at $2.6 billion even though the shares of her online beauty and fashion company Nykaa have tumbled steeply. She was worth $4.5 billion in last year’s list.

Other new women who’ve made it to the list because of personal tragedies include Rekha Jhunjhunwala ($5.1 billion) who has taken the place of her late husband, the stock market wizard Rakesh Jhunjhunwala, and Rohiqa Cyrus Mistry ($7 billion), whose husband Cyrus Mistry, died in a car crash. The Pallonji Mistry group had to face two deaths last year – those of the group’s 93-year-old patriarch Pallonji Mistry and his son also passed away a few months later.

Other newcomers to the list include Bangalore-based Nikhil Kamath and his brother Nithin, who cofounded discount brokerage Zerodha. Nikhil’s wealth is pegged at $1.1 billion while his older sibling Nithin is worth $2.7 billion.

A growing number of billionaires is a sign of failure. It is no secret that economic inequality has risen exponentially in the last few decades, both in India and globally. According to the World Inequality Report 2022, India is one of the most unequal countries in the world in terms of both income and wealth inequality.

According to Oxfam’s report titled “Survival of The Richest”, the large disparity in wealth distribution in India, saying that more than 40 percent of the wealth created in the country from 2012 to 2021 had gone to just 1 percent of the population while only 3 percent had trickled down to the bottom 50 percent.

Meanwhile, the country’s poor and middle class were taxed more than the rich, Oxfam said. Approximately 64 percent of the total goods and services tax (GST) in the country came from the bottom 50 percent of the population, while only 4 percent came from the top 10 percent, the report said.

“India is unfortunately on a fast track to becoming a country only for the rich,” Oxfam India CEO Amitabh Behar said. “The country’s marginalised – Dalits, Adivasis, Muslims, women and informal sector workers are continuing to suffer in a system which ensures the survival of the richest.”

The rich, currently, benefited from reduced corporate taxes, tax exemptions and other incentives. To correct this disparity, it is imperative to implement progressive tax measures such as wealth tax. But unfortunately, India has abolished wealth tax and introduced surcharge. Now the surcharge rate has declined. The system is rigged to favour rich.

 

 

The author is an eminent economist columnist and social thinker . Email : [email protected]

DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English.