Wealth distribution in India over the years

Here is some wealth distribution statistics of Indians shared on Twitter from the World Inequality Database.

Some inferences

– In 1960s, the bottom 50 % had almost equal wealth than the Top 1% , about 12 % each

– But by 2010s, the share of the bottom 50% halved from 12 to 6 % and the wealth of the Top 1 % nearly tripled from 11.87 % to 31.55%. The Net effect due to this is that by 2020s, share of wealth of the Top 1% is now five times that of all of the bottom 50 %. That shows how the wealth inequality has grown.

– One can see that from 1960s to 1990s, the wealth distribution has not significantly changed. But from 1990s, the inequality has grown rapidly. Clearly liberalisation has helped the wealthy and hurt the poor. In 1990s, Top 1 % wealth doubled from 12.5 % to 23.3 %.

– This table does not show how the wealth of the middle class, those who are neither in the top 10% nor in the Bottom 50 % has moved. But one can do some simple arithmetic and see that their share in the wealth has steadily declined from 45 % in the 1960s to 30 % in the period 2011-2020.

– The one group that has steadily maintained its share of the wealth is the upper middle class. Those who are in the Top 10 % but not in the Top 1 %. This class’s share in the wealth has remained more or less constant at 31-32 % of the wealth.

– The gap between the upper middle class and the middle class has grown. Now the 9 %, who make up the upper middle class own more wealth than the 40 % below them. 32 % against 30 % of the wealth .

– The table clearly tells that it is the Top 1 % who are gaining at the cost of the middle class and the poor.

This table stops at 2020. Post 2020, from what we read COVID has only accentuated the income and wealth inequalities. The K-shaped recovery after the pandemic has helped the rich and hurt the poor.

This does not bode well for our society. If the economic conditions worsen due to a slowdown and unemployment increases, the poor are not going to sit quiet. There may be social unrest. Crime may increase. The wealthy have much to fear, particularly the Top 1%. They will not just stop at making and sharing memes on Ambanis and Adanis

Does the government have any responsibility to set this distribution right ?


Some facts and thoughts on the Rupee depreciation against US $

Yesterday, the rupee depreciated further against the US $ and the US $ has now crossed Rs 81. It is better to call this as further strengthening of the US $. US $ has become stronger against most other currencies. This can be seen from the Dollar Index (DXY)..This is an index which captures the value of US $ against a basket of currencies. It is now at 113 a 20 year high. It has appreciated 21 % in the last one year.

US $ is the most powerful currency in the world. Maximum trade is in US $. Countries keep their foreign exchange reserves in US $.

So movement in US $ affects every economy.

Now , why is US $ going up. One clear reason is the increase in interest rates in the US economy. The Federal reserve has increased the interest rates 3 times in 2022..Each time 75 bps i.e 0.75 %.

When interest rates in US goes up, US treasuries become attractive and money invested abroad by US funds return to US. This causes the currency in the foreign country to go down where investments are being sold and US $ to strengthen. India has also seen Foreign institutional investors selling bonds and shares.

Whereas, the Dollar Index has appreciated by 21%, Indian rupee has depreciated only by about 10 % in last one year. So Indian rupee has depreciated against the US Dollar but strengthened against many other currencies.

The reasons given by economists are

– India is one of the fastest growing large economy, so FIIs are not withdrawing from India as much as from other countries

– RBI is intervening to reduce volatility and has sold over 80 Billion $ from its reserves

Will Rupee depreciate further ?

In all likelihood. US Fed has indicated that they will increase rates further as their inflation is still at 8 % as against their target of 2 %.

India’s trade deficit is only increasing. Our import bill is growing because we import 80 % of our oil and oil prices are high, though lower now than the peak . The Russia-Ukraine war and economic sanctions around it are a big influence in this market. Our exports are becoming uncompetitive because our currency is stronger than other competing countries.

Will RBI defend the rupee ?

Only in a limited way in the Forex market . We have about 9 months imports as Forex reserves. We can see that if Forex reserves go down below the safe limit we can become a Sri Lanka or a Pakistan.

RBI will probably defend the rupee by raising rates in tandem with other countries, particularly US.. High interest rates hurt growth. Also it has to manage inflation in India. .So it will be a tough balancing act.

So what is the future economic outlook ?

Not very bright. We are importing inflation because of weaker rupee. Growth will be affected because of higher interest rates in India. Whole world is slowing down fast, so exports are tough.

As for what will happen to stock markets. I have no idea. It has a mind of its own.

  • Posted by G.Mohan on his Facebook page on 24th September, 2022

Old rich vs new rich – public perception

Queen Elizabeth-II was loved and respected by the British people. Her popularity extended far and beyond, definitely in the Commonwealth nations. In India, also she was mighty popular, otherwise the news channels would not have given so much coverage.

QE-II was just a ceremonial head of a once powerful country. She was not a celebrity like a film or music or a sports person She was not a social worker like a Mother Teresa or a political leader like Gandhi who touched people’s lives and made a difference. If anything she was quite distant and cut-off from the public, when she appeared in all the events.

As I watched occasionally the TV reportage of the mourning and funeral ceremony of Queen Elizabeth-II, a thought crossed my mind.

Do the people have different yardsticks for the old rich and powerful versus the new rich celebrities ?

Are the old rich and powerful who inherit their wealth, name and influence accepted easily by the common people ? If they spend lavishly on events they are celebrated as keeping up with traditions,. Labels like classy, sophisticated are used.

The new rich who often become wealthy by the dint of their own talent or effort, their means of becoming rich are questioned. The system that makes them wealthy is questioned. You will hear comments like ” Why should the IPL play these cricketers so much ? ” How can Ranveer Singh buy a Rs 119 crore bungalow ? ” ” Rakesh Jhunjhunwala must have done some insider trading to become so rich” ? Wedding events of the new rich usually carry labels like ” Big Fat Wedding”, “Bollywood style” , gaudy, garish etc

Read descriptions of a palace in Rajasthan or Mysore and read the description of a film star’s or industrialist’s residence, you will see the double standards.

I get a feeling that people do not grudge inherited wealth or influence but suspect those who become wealthy on their own. Perhaps, they accept it as destiny for the first but cannot accept that the chances available to the new rich were available to them also.

Tell me what do you think.

  • Posted by G.Mohan on his Facebook Page on 20th September, 2022

Byju’s and Adanis, whose failure will impact whom and how

Byjus and Adanis , both started before the pandemic but used the COVID to pivot and grow big and rich.

There is a lot of speculation about their long term survival due to the high risk game they are playing. It will be a good thought exercise to think whose failure will have a bigger impact and it will hurt whom.

Let us start with Consumers/ Users .

Byju’s is a consumer facing business…It has over 100 million regd students and 6.5 million annual paying subscribers accroding to their web-site ..If Byju’s goes under then all these students will lose a service and many of the paying subscribers will feel cheated as they have paid in advance and bought devices, which will become useless.

Adani group is a highly diversified business house..Most of them are essential services / utility services like ports, airports, power that are unlikely to get stopped because of the owners financial troubles. Govts or banks may take over and change the management.


As per Byju’s web-site they employ over 10,000 employees out of which about 2500 are educators/ teachers … If Byju’s goes under, then these employees will lose job.. But most of them would be mentally prepared to jump ship …They may have to settle for lower paying jobs.

Adani is a much larger employer than Byju’s. As it is unlikely that Adani businesses would completely shut down, most of their employees will continue working if there is a management change. The high flying managers close to the management will all lose jobs… There will be a lot of uncertainty around their future.

Investors and Financiers

Byju’s is the most valued start-up in India with a valuation of 22 Billion $. Its initial funding has largely come from angel investors and venture capital companies. Later many overseas Private Equity funds have invested big particularly during the pandemic. Many of them are waiting to encash by selling in an IPO, much like what a Zomato or a PayTM did. It is in Indian public’s interest that this IPO does not happen before the Byju bubble bursts. If it bursts before IPO then only these institutional investors will lose big apart from the Byju Ravindran’s family and friends.

Adani failure can have a huge impact on the financial system.. Much much bigger impact than Anil Ambani group or IL & FS failure. Adanis have borrowed big from Indian banks and foreign institutions. Their companies are listed and many companies have retail shareholding. If their shares crash many small investors will lose directly and also indirectly via mutual funds. Investor impact may unravel like the Yes Bank or DHFL bankruptcies , but at a much bigger scale.


Byjus is a big spender in media as an advertiser. It supports many sports like cricket and football. There will be an adverse impact surely on their earnings.

Adani failure will have a bad impact on the vendors and contractors who supply them goods and services. Adani is seen as close to the political dispensation. But this is hard to prove and also the party in power is very clever in communication, so it is unlikely that Adani failure will stick and tarnish their image. So the political impact will be minimal, in my opinion.

Whereas, I do not wish them to fail , I think that India and Indians will move on , even after they fail.

  • Posted by G.Mohan on his Facebook page on 19th September, 2022

Adani – Personal wealth and Corporate Debt

“Adani group is Most Valued Group in India” says a headline in ET today. According to Forbes, Gautam Adani briefly surpassed Jeff Bezos to become the second richest man in the entire world.

If you had asked any Corporate or Business watchers at the beginning of this year, who will be the most valued group by the end of the year , it would have been Tata or Reliance. Adani was not even in horizon. If you had asked who will be the richest Indian by the end of the year, it would have been Mukesh Ambani or Azim Premji..Maybe a few would have mentioned Gautam Adani, because Adani stocks did very well in 2021 also.

Now this sudden rise in wealth of Adani group and Gautam Adani over the last year or so is creating a lot of dissonance in the minds of people. They question, if this is for real ? Is there a scam hidden there ? Is there a methodological issue of the way they make these lists ? Can businesses which have grown fast by borrowing big be compared with businesses that have grown over years gradually by ploughing back profits ?

Now, let me try to give my opinion on the method and where lay watchers are mixing it up.

Valuation of a group is based on the market capitalisation of all the listed group companies. Market capitalisation is calculated by multiplying the market price of the shares with the total number of shares in the company. That is the reason valuation of groups change every minute.

Forbes prepares the list of the billionaires by finding the shares held in different companies by the promoters and multiplying it with the share prices. Therefore this list is also as dynamic as the stock market. Usually, they do not include shares in unlisted companies and other assets like land, buildings or other assets. The assumption is bulk of businessmen’s wealth is in their businesses.

Now let us come to Adani group and Gautam Adani. The valuation of the group and the wealth of its promoter is linked to their share prices. Adani group shares have done very well in the last 2 years.

The growth of Adani group is largely funded by borrowing. The Finance theory says if the debt is high and the interest burden is high, it should reflect in its earnings and therefore its valuations. The Adani group stocks seem to be rising despite the markets knowing this information .

Gautam Adani’s wealth comes from the fact that he has a high stake , between 40 to 65 % in the listed companies. We do not know how he has funded this ..But the debt people talk about is in the company books and not his personal debt. So there is no methodological issue there. He is really rich as measured by Forbes. There is no perception or subjectivity issue here.

The rise of valuation of Adani group and Gautam Adani are all entirely dependent on the share prices of Adani stocks. Are their high prices justified ? Will they hold up over the long term ? Is there a market manipulation going on in their prices ? We don’t know.

If we accept that Tesla is more valuable than all the Auto majors put together and Elon Musk is the richest man in the world , we have to accept Adani Group as the most valuable in India and Gautam Adani as the richest Indian.

Will Elon Musk or Gautam Adani maintain their positions ? We don’t know. It is entirely a function of their share prices.

  • Posted by G.Mohan on his Facebook page on 13th September

The Most Powerful Women in Business in India

The Fortune India magazine in its latest issue has a feature on ‘ Most Powerful Women in Business’. There are many known ones and a few unknown ones. It is always interesting to read the career paths taken by these women.

The magazine has named two women as Joint Winners. Nirmala Sitharaman and Nita Ambani.

The most powerful women in business, need not be business persons I guess.

Nirmala Sitharaman is the Finance Minister of the country. So obviously, in a country where government is still very important for business, she holds a very powerful position. Yet, if she is moved out of that position, will she be powerful ? Politically, she is a light weight. She is not even a Lok Sabha MP. She has risen to the important position through the back-door of being a spokesperson of the party.

Nita Ambani is the Joint No 1. Nita Ambani is a Director of Reliance Industries. She heads the Reliance Foundation. She heads the IPL team Mumbai Indians and other sports franchises owned by the Ambani family. Everyone knows that all these positions have come to her because she is married to Reliance Industries boss Mukesh Ambani.

Neither of them are entrepreneurs or professional managers who have risen to the top. But , I guess they are ‘POWERFUL’ !!.

Does wealth make someone powerful ? The richest women in India , Savitri Jindal is not even in the Top 50. Unlike Nita Ambani, other billionaires wives do not appear in the list.

Does a string of professional achievements make someone powerful ? Leena Nair, the CEO of Chanel, who can claim to be one of the most successful professional woman manager gets the Third spot in this list.

Being Powerful or being perceived as powerful is such an intangible thing that you cannot say what makes someone powerful. It is even more complicated for a woman

  • Posted by G.Mohan on his Facebook Page on 13th August , 2022

LED lighting and its rapid but quiet spread

I had an ‘a-ha’ moment today, when I heard that now more than 50% of all lighting in world is by LED lighting. Thanks to LEDs the share of lighting in energy consumption has rapidly declined all over the world.

People talk a lot about how various new technologies will replace old technologies. So much hullabaloo was made about computers in the 1980s. In the ’90s it was about the Internet and mobile phones. In the last few years, it has been about Electric Vehicles.

But I have rarely seen much talk about LEDs. I even wonder if school text books have even a mention of who invented LEDs. Maybe they are still talking about Thomas Alva Edison.

For those like me, who grew up in incandescent lamps and tube lights , here is a short extract about the scientists who created LEDs. Their invention was so good that it required very little marketing. The argument to shift was so compelling that people accepted it quietly. Hats off to them.


In 1962, GE scientist Nick Holonyak was trying to develop a better laser than his peers. Instead, he set the basis for something that would replace incandescent bulbs and change lighting forever. The discovery was further developed in the 1990s by the 2014 Nobel Laureates Isamu Akasaki, Hiroshi Amano and Shuji Nakamura who invented the blue light-emitting diode. By using blue LEDs, white light was created in a new way that made possible long-lasting and more efficient alternatives to older light sources.

  • Posted by G.Mohan on his Facebook page on 2nd August, 2022

How we calibrate our lifestyles on rules around us ?

During the last few days, Whatsapp groups and Twitter are full of memes on the recent introduction by government of GST on some essential food items and services. Maximum number of memes I found around ‘dahi’ or “curd”.

One of the cartoon (pasted here) from Economic Times by R Prasad says, calibrate your lifestyle according to GST slabs. I was wondering if anybody would do that.

But then, I and many of my generation have done that according to the rules around us.

I remember a time, when an ‘early to bed’ guy like me , used to stay awake beyond 11.00 PM just to avail the facility of 1/4th STD charges. (STD rates in India were quite steep in the late 80s and early 90s) . With so many other Indians trying to do that simultaneously, the networks were very busy and you would be lucky if you got through by 12 O’Clock. The people regularly waiting at the STD booths formed a social group of sorts.

Today, we were remembering the music director Sudhir Phadke on his birth anniversary in my school Whatsapp group. Sudhirji gave music to very few Hindi films but one song is remembered fondly because Radio Ceylon used to playi it on 1st of every month. ” Din hai suhaana aaj pehli tareek hai” sung by Kishore Kumar.

This led to a discussion on the significance of ” Pehli Tareek” then. Friends, who have grown up in families which depended on salaries , would recall how life revolved around “pehli tareek”. All spending decisions around the timing of the pay cheque .

In the steel colony, where I grew up in Bhilai, the markets would be crowded during the month beginnings and would be quite desolate during the end of the month. Any sudden requirement that fell towards the end of the month , be it a textbook or the school uniform shoe getting torn or a serious breakdown of the bicycle expenditure was always postponed till the next “pehli tareek”. In offices, during the first week, it was common to take a couple of hours off to go to the bank to withdraw money.

Now obviously, even for the salaried class things have changed. ATM/ Credit Card/ Digital payments have reduced the significance of the bank branch and to some extent the significance of “Pehli Tareek”.

Another rule with which some smart people used to play around was on the method the banks used to calculate interest on savings account. Until 2010, banks used to calculate interest on savings interest based on minimum balance kept in the a/c from 10th of any month and last working day of that month.

Now, how the smart people used to play around with this old rule. We had a neighbour, who used to invariably come towards the end of the month to borrow some petty cash. We knew they were reasonably well-to-do and they had no real money problems. She would promptly return the cash borrowed by the first week of next month. But, the lady once blurted out while talking that her husband would not withdraw any cash after 10th from bank because the bank interest earned would go down. 🙂

If human psychology is tuned to maximise economic incentives around the rules, I am sure there are few people who are trying to calibrate their lives around the GST slabs. More households will start making ‘dahi’ at home to save on the GST. Or maybe not.

  • Posted by G.Mohan on his Facebook page on 25th July,2022

Are reasons for giving up Indian Passport, only “Personal” ?

There was a Question to the Govt of India in Lok Sabha yesterday.


Renunciations of Indian Citizenship

Haji Fazlur Rehman

(a) the details and the number of persons who have renounced Indian citizenship till the current year since 2019;

(b) the reasons given by these persons for renouncing Indian citizenship; and

(c) the names of countries for which they have taken citizenship?

The answer also I am pasting below.




(a) & (c): The details as provided by the Ministry of External Affairs in respect of the number of Indians, who renounced Indian citizenship and the countries from which Indians have received citizenship are at Annexure-I.

(b): Individuals renounced Indian citizenship for reasons personal to them.

I will be giving the link to the answer, where you can see the trend and also which countries are people settling down by giving up their Indian citizenship.

I am just giving some salient points

1. In 2021, 163,370 Indians gave up their Indian citizenship. This was a huge jump over 2020 ( COVID year), when only 85,256 Indians gave up their Indian passports. The true comparison should be with 2019, when 144,017 gave up their Indian passports.

2. USA remains the biggest country where Indians migrate to, accounting for nearly half of the people who migrate out of India.

3. Besides USA, Australia, Canada, UK are three countries where the number of Indians migrated and gave up Indian passports last year was more than 10,000 each.

4. USA, Australia, Canada, UK account for 80% of all the Indians who decided to give up their Indian passports.

5. Interestingly, countries in the Gulf like Saudi Arabia, UAE, Oman , Bahrain where a large number of Indians go on work visa are not the countries where they decide to settle and thereby give up their Indian passports.

6. Countries like Singapore, Malaysia, Fiji where there are many Indians settled for years are not among the countries in Top 10.

The government’s reply to the answer for “the reasons given by these persons for renouncing Indian citizenship” was that they were ” personal to them”.

It is not incorrect. But I would like to examine how many of these Indians who have settled abroad, settle for purely ” personal” reasons.

A typical script of an Indian of my generation who has given up his/ her Indian passport and settles in USA reads like this.

– Go abroad first on student visa to pursue higher education

– Work for a year or two on OPT , partly to get some experience and also earn some dollars, while searching for a job.

– Get an H1B and work hard to see that the employer sponsors his/her Green Card.

– Meanwhile get married and bring the spouse.

– Once the Green Card goal is achieved, after almost 5 to 6 years in the US, career looks promising. Some pursue professional career and some go on to become entrepreneurs. In the meanwhile, family is growing and the family gets used to the US lifestyle. Link with India and visits to India become less and less frequent.

– If parents and in-laws are willing and flexible, get them to visit USA often and even make them settle there.

– In the meanwhile, links with India have become even lesser. The Indian passport becomes a burden for all the worldwide travel. Mentally, they do not see any reasons for returning to India. The benefits of a US Passport outweigh the Indian passport

– They decide to give up the Indian passport.

Now in the above script, what would I consider as a purely ” Personal” reason

– A spouse joining his/her spouse after marriage

– A parent or a child joining their family members, who are already citizens of that country

But how or why did the first person in the family decide to go abroad. Is it only “Personal” ?

– Is going abroad to pursue ‘ higher education’ a purely personal reason ?

– Is taking up a job and pursuing career or business in a foreign country a purely “personal” reason ?

– Is India being no longer attractive to return to for those who have spent years in First world countries like USA a purely “personal” reason ?

The government might have got away with the clever answer in the Lok Sabha. But surely, the policy makers have much to think about how to make India attractive for Indians first not to leave and also return back to India after their stints abroad.

Link to the Lok Sabha question you will find the comments section.

  • Posted by G.Mohan on his Facebook Page on 20th July 2022

The suspension of a PSU MD and CEO

A rather disturbing and unbelievable news has come out. MD and CEO of Dredging Corporation of India (DCI), a mid-size PSU, has been suspended. He has been suspended for misrepresentation and concealment of facts which make him ineligible for his appointment.

You will find below the press release from DCI. Some of the misrepresentations are like

– He claims to have done an MBA from an institute that does not exist

– He claims to have been simultaneously doing PhD and working in two companies, one in India and another in Dubai

– This one is a killer one. He was terminated from this very company 20 years ago , where he became MD and CEO in 2021.

This gentleman goes by the name of Dr GYV Victor. His Twitter bio is very impressive. From an International Arbitrator to a Chartered Physicist, he is an all-rounder. In the company house newsletter, he is addressed as Prof Dr..One gets reminded of Dr Kalaignar and other such prefixes, popular in South India.

This Prof Dr has been MD and CEO since March 2021. Now in July 2022, the company has unearthed these and suspended him. So the background check which is necessarily done before appointment seems to have been done well after a year of appointment.

I don’t know whether to admire the audacity of this Prof Dr Victor or to criticise the governance failure on the part of the company and particularly it’s Board of Directors.

If I look at how this could have happened , I can think of one possible scenario. It is highly unlikely, that this man is just a clever cheat, a Natwarlal. Victor must have been planted by some interested parties. The interested parties knew that this PSU, Dredging Corporation of India , after the backdoor privatisation was in a No-man’s land. ( By backdoor privatisation I meant, the government sold its stake in DCI to 4 port trusts. It ceased to be a PSU but remained under govt indirectly under Ministry of Shipping). The Chairman of Vizag Port Trust was given additional charge as Chairman of DCI. The Chief Vigilance Officer of Vizag Port Trust was also the CVO of DCI.

When the company came in the No-man’s land , the PSU processes of background checks and Vigilance Enquiries would have fallen through the cracks. Maybe, the interested parties saw to it , this actually happens. With 4 part-owners, part-time Chairman and part-time CVO there was very limited oversight and accountability.

Some past colleague or employees who knew Victor’s history in the company would have blown the whistle. Given the speed of these investigations in the government system, it would have taken this long to unearth and finally issue the suspension order.

  • Posted by G.Mohan on his Facebook Page on 16th July 2022