Equity analysis: India’s billionaire boom isn’t a sign of a hunky-dory economy

In a recent talk at the Institute for Social and Economic Change, economist Sanjay Reddy noted a startling fact about India’s growth process. According to the International Monetary Fund, in 2024, India ranked 142nd out of approximately 190 countries, with a nominal per capita GDP of around $2,700.

Yet, it is also home to one of the largest and fastest-growing populations of billionaires in the world. With 200 billionaires in 2024, according to Forbes magazine, India ranks third globally in its billionaire count, trailing only the US and China.

This anomaly—of a high number of billionaires co-existing with low average income—raises critical questions about wealth distribution, economic inequality and the nature of India’s growth story.

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The extent of this anomaly becomes clearer when we examine the ratio of dollar billionaires to average income between 1997 and 2024, plotted against average income, as shown in the graph alongside. In a rough sense, this ratio is a measure of wealth concentration, since a larger number means that more billionaires are being ‘supported’ by the income of the average citizen.

The picture tells a stark story. The US, China and India were the largest, second and fifth largest economies in the world, respectively, in 2023. Over the past 25 years, India’s economy has grown roughly eightfold in nominal terms, but the ratio of dollar billionaires to average income has surged dramatically, far outpacing both the US and China.

When China had a similar per capita GDP to India’s current level, which was back in 2003, it had only about 10-15 billionaires. Today, India has around 200. India is producing far more billionaires at much lower levels of average income than any other country, a distinction that underscores the extreme concentration of wealth in the hands of a few.

At first glance, this phenomenon might be interpreted as a sign of India’s economic dynamism and entrepreneurial talent. The country’s ability, that is, to create value against the odds in a relatively poor economy. The past decade, for instance, has seen the rise of numerous unicorns (or startups valued at over $1 billion), signalling the emergence of a new generation of successful business people.

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However, a closer look reveals a more complex reality. According to Forbes, billionaires are described as ‘self-made’ if they made their fortune without inheriting generational wealth. By this measure, where recorded, India’s billionaires are less likely to be self-made compared to their counterparts in the US and China.

In China, for example, this number is around 90% and in the US it is about 70%, while in India it has been under 50% throughout this past decade. A significant share of India’s billionaires come from established business families who have inherited their wealth and expanded it through diversified holdings.

This suggests that wealth in India is often less about innovation and industrial dynamism and at least as much about entrenched privilege and deep pockets. Globally, as of 2023, India ranks 46th out of 67 countries in the proportion of billionaires who are self-made.

The dominance of India’s billionaire class is vividly reflected in the country’s stock market. As of 2022, the net worth of India’s 166 billionaires accounted for about 20% of the market capitalization of its major stock exchanges. In contrast, the net worth of China’s 400-plus billionaires accounts for 18% of its market capitalization (although this has grown significantly from 2010), while the US’s 700-plus billionaires’ net worth represents just 10% of its stock market valuation.

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India’s billionaire paradox is not just a statistical curiosity; it is a reflection of deeper structural issues in the country’s economy and governance. It raises questions about the viability of an economic model that creates disproportionate rewards with very little shared prosperity. The rise of billionaires is occurring in a country where hundreds of millions still struggle to access basic necessities. According to the Food and Agricultural Organization, for example, 55 % of Indians were unable to afford a healthy diet as of 2022.

The billionaire boom is the starkest indicator of the underbelly of India’s growth story: a four-decade-long productivity boom may have entrenched an enclave economy, with a relatively small elite co-existing with a large majority that lives in utter precarity.

To be sure, India has always had inequality, and certainly there has been progress for many. Absolute poverty as defined by the World Bank, for example, has decreased steadily over the last two decades. However, on many other fronts, progress for the majority has been haltingly slow.

The implications of this wealth concentration also extend beyond inequality. Standard economics suggests that the dominance of a few in the stock market and key industries can stifle competition, limit opportunities for smaller businesses and create systemic risks for the broader economy.

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India’s billionaire paradox invites a broader conversation about the kind of economy and society it aspires to. It is certainly true that other countries have gone through similar gilded ages, and that the very wealthy in other situations have gone on to become very influential philanthropists in their time. While there are some notable exceptions, this kind of sharing and giving at scale has not yet been seen in India.

At this point, India’s uneven growth is not solely a conversation about policy prescriptions. It is equally a question of politics and ethics: about the values that will shape India’s growth over the next decades.

These are the authors’ personal views.

The authors are, respectively, professor of economics at Azim Premji University and senior economist at the Institute for New Economic Thinking; and an Independent Researcher.