Despite the increased penetration of banking and growth of financial instruments like stocks and bonds, gold continues to play a dominant role in assets of Indian households accounting for as much as 65.84 per cent of individual wealth in FY13, according to a report released by Karvy Private Wealth on Monday.
According to the report, which covers India's financial behaviour for the financial year ended March 31, 2013, individual wealth in physical assets stood at Rs 92.06 lakh crore, of which the share of gold was Rs 60.61 lakh.
Investment in real estate was Rs 31.43 lakh crore, excluding primary residence.
Karvy's fourth annual edition of its India Wealth Report ranked the economy 10th largest in the world in terms of nominal GDP. India ranked 3rd largest in terms of GDP based on purchasing power parity, behind only the United States and China.
The report has projected an overall wealth held by individuals in India to double to Rs 411 lakh crore in the next five years.
The ratio of financial assets to physical assets in total wealth (55: 45) are expected to broadly remain the same, the report adds. Similarly, wealth held in real estate ( excluding primary residence of the individual) is expected to double in the next three years.
India recorded a GDP growth rate of 9.2 per cent in 2010- 11 and 6.2 per cent in 2011- 12 FY12 while growth slumped to a 10 year low of five per cent in 2012- 13. "FY13 was a year of challenges for the economy with a slowdown experienced in agriculture, manufacturing as well as service sector. This, coupled with rising current account deficit, high inflation, weakening exports due to weak global demand and delayed policy action, slowed down the GDP growth rate. As a result, even FDI inflow took a hit registering a 38.1- per cent decline from 2011- 12 making foreign investors wary about India," the report said.
Courtesy: Mail Today
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