NEW Delhi: They call it the Richie Rich Club and it is about to get even richer. India’s wealthiest will quadruple their net worth in the next four years, a report said, with hundreds of thousands of new entrepreneurs and inheritors to become multimillionaires.

The survey, based on interviews with 150 ultra-high net worth individuals, came amid signs of returning business confidence in the world’s biggest democracy. Recent years have seen lacklustre growth, rising prices of basic foodstuffs and a weakening currency.

The new Bharatiya Janata Party (BJP) government won a landslide victory in May on a pledge to reinvigorate the ailing economy.

Despite the slowdown, there are nearly a sixth more Indians worth more than $3.75m than there were a year ago, the report for the Kotak Mahindra bank, noted.

“Cities are mushrooming, the middle class population growing, opportunities have increased manifold and the political environment has improved greatly in recent months,” said Murali Balaraman, a co-author.

Between them India’s rich hold assets worth a trillion dollars, which is around a fifth of the total wealth in the country. Within four years, that total is likely to reach $4tn, the report says, making three times as many people multimillionaires. Serving the new rich — and the old money — is a booming luxury market.

“They really want to show or talk about their wealth in a really subtle way and consumption of luxury goods is a nice way to do it,” Balaraman said.

Abhay Gupta, the CEO of brand consultancy Luxury Connect, said the market for top end goods and experiences would “only get bigger”.

“There is a huge aspirational class who look up to what the very wealthy are doing and then copy it,” he said.

Cars are among the most popular items bought, the report says. Whereas five years ago locally made SUVs were shown off by the wealthy, now only foreign cars will turn heads. Mercedes saw a 47 per cent surge in sales in India last year. BMW launched a new $200,000 model in Delhi this week. India’s appalling infrastructure restricts demand, however. Lamborghini’s chief executive, Stephan Winkelmann, admitted last year that the traffic and roads in India “are not so suitable” for the $450,000 sports cars.

In India, Lamborghini sells two models: the Gallardo and the Aventador, which has a top speed of 217mph.

Winkelmann said Lamborghini’s Indian customers were “much younger” than those in Europe, with a typical buyer being in his 30s. The most popular investments remain real estate — mainly within India — and jewellery.

By arrangement with The Guardian

Published in Dawn, July 26th, 2014