The Sky and the Stratosphere: Concentrated Wealth in India During the Last (Lost) Decade

Abstract

This paper provides new and improved estimates of wealth concentration in India over 2012-2018. Official surveys show a decline in wealth inequality and mean wealth per-adult for the first time in three decades. We argue that although these wealth surveys are meant to be nationally representative, they underestimate the upper tail of the Indian wealth distribution -- top wealth levels appear orders of magnitudes below externally measured estimates and unrepresentative of increasing stock-market participation over this period. Because wealth is so highly concentrated, wealth in the upper tail matters a lot for realistic estimates of wealth inequality. By combining official surveys and some of the largest datasets of India's richest persons, we provide new estimates of top wealth shares and total personal wealth in India. We find that personal wealth is underestimated by nearly 54% in official data, and this gap has increased sharply over the 2010s. Our revised estimates show wealth concentration to have sharply increased over 2012-2018. The share of India's top 1% is higher than similar estimates for Asia, and second only to Russia.

Keywords: Wealth inequality, wealth concentration, Rich lists, Pareto distribution, Top shares, Gini, India, HNWI, elite distress

JEL Classification: D31, E01, E21, O1