A silver lining amid the ‘quit India’ movement of millionaires

Any occurrence can be viewed from various perspectives. A glass half full can also be called a half-empty glass. So, the expected exodus of 4,300 millionaires from India in 2024 can be seen both as an improvement and as a reflection of things going awry. The figure has been projected by international investment migration advisory firm Henley & Partners, which states that many prefer UAE as their destination. It defines a millionaire as someone who has liquid investable assets totaling $one million or more. On the face of it, this exodus is a big loss to the nation, as it stands to lose billions of dollars that could have been invested or spent back home.

Surely not a happy happenstance, but—if viewed from another perspective—the situation may not appear to be as depressing, for the number is coming down. Last year, 5,100 Indian millionaires relocated abroad. Further, they are not a species on the verge of extinction. “While India loses thousands of millionaires each year, with many migrating to the UAE, concerns over the outflows may well be mitigated as with wealth growth of 85 per cent over the past decade, the country continues to produce far more new high-net-worth individuals than it loses to emigration,” the Henley report said.

Moreover, India is not the only country which the rich are leaving in droves. In fact, China and the UK suffer more on that count. India’s net millionaire exodus is less than 30 per cent of China’s. Even the UK, with a much smaller population than that of India, is expected to lose 9,500 millionaires this year. Still, the millionaire exodus is a development which the powers that be in India should be worried about. It highlights the fact that, despite the impressive economic growth in the last 30 years, certain governance challenges stay persistent. Corruption, red tape, policy unpredictability and smothering regulation dampen the animal spirits of entrepreneurship.

Moreover, systemic challenges are coupled with infrastructure deficit, inadequate state capacity (suboptimal administrative acumen and awful law and order situation in many parts), dearth of skilled labour, incessantly degrading environment, and a deteriorating educational system. The recent spate of paper leaks suggests that the rot is quite deep in the system. Many people would like to escape from this system. As millionaires have the means to do so, many of them are making that choice.

The Henley report says that the rich are going “to places where they can enjoy a better lifestyle, have access to more premium health, education services and cleaner environments.” Policy and decision makers in India need to address the pressing issues with a multipronged approach. They must begin in earnest with enhancing state capacity, ensuring transparency, and improving efficiency. Red tape must be curtailed, corruption combated, and views of prospective investors must be respected so that their confidence remains intact.

Investment in infrastructure, healthcare and education ought to be the priority. This exercise should be done in a manner that doesn’t burden the exchequer beyond a point. Another focus area should be sustainable development. The environment should not just be protected but also cleaned up. These measures are the sine qua non of Viksit Bharat.