The Great Wealth Transfer and The Economy Reshape in India

Aishwarya Srivastava, Arka Jain University

The Great Wealth Transfer

India is on the brink of a major financial transformation that is expected to alter the country's economic landscape significantly. It is known as the "Great Wealth Transfer," which involves the transfer of assets and wealth from one generation to the next.

As baby boomers retire, their children will inherit their wealth and invest it in new and innovative ways, which will drive the economy towards novel and exciting directions.

The Boston Consulting Group's experts predict that India's Great Wealth Transfer will be worth an astounding $4.6 trillion between 2018 and 2027, considering various factors such as population size, economic growth rate, and age demographics. Other renowned sources, such as Credit Suisse and Edelweiss Securities, have estimated similar values, with predictions that the transfer of wealth between generations will be worth $3.5 trillion over the next decade and $4 trillion over the next 25 years, respectively

These projections make it clear that the Great Wealth Transfer is going to have a huge impact on the Indian economy. As trillions of dollars change hands between generations, we can expect to see significant changes in everything from investment patterns to consumer behavior.

But what does this mean for India's economy?

The Great Impact

Well, for starters, the transfer will cause a massive influx of capital into the financial system. As the new generation takes control of the country's wealth, they will invest it in businesses, start-ups, and infrastructure, creating new opportunities for growth and development.

This is great news for India's economy, which has been struggling to keep up with the demands of its rapidly growing population.

With new investors taking control of the country's wealth, there will be a demand for exciting and fresh investment opportunities, and a fertile ground for start-ups to flourish.

India has already witnessed a surge in start-ups in recent years, with over 75,000 new companies emerging across the country. These start-ups are utilizing innovative technologies to solve existing problems, creating new job opportunities, and driving economic growth.

Of course, with any major economic shift, there are going to be some bumps in the road. We can expect to see some businesses struggle as the economy adjusts to the changes brought about by the Great Wealth Transfer.

Student debt and rising housing costs will impede millennials' ability to invest and shape the economy.

The financial burdens that millennials face, such as student debt and high housing costs, will limit their ability to invest and reshape the economy. This means that the Great Wealth Transfer will not necessarily translate to increased economic power for millennials.

The rise of automation will impact the economy more than the Great Wealth Transfer.

The automation of jobs and the increasing role of artificial intelligence will have a greater impact on the economy than the Great Wealth Transfer. This shift will lead to significant changes in the job market, which will further limit the power of millennials to reshape the economy.

The Great Wealth Transfer will lead to greater inequality.

However, there are some downsides to the Great Wealth Transfer. For one, there's the possibility of a "gilded ghetto" – a scenario where the super-rich continue to accumulate wealth and the rest of society becomes increasingly unequal. It may exacerbate the already-existing wealth gap in India.

The COVID-19 pandemic’s impact on the Great Wealth Transfer

The COVID-19 pandemic has impacted the Great Wealth Transfer in India, causing temporary disruptions due to economic uncertainty and market volatility. However, it has also accelerated the use of digital technologies, making the transfer of wealth more efficient and accessible. The pandemic has highlighted the importance of estate planning, resulting in a surge in demand for estate planning services.

With the right policies in place, the country can harness the power of the Great Wealth Transfer to create a more prosperous and equitable society for all.

Conclusion

In conclusion, the Great Wealth Transfer presents both risks and opportunities for India's economy for years to come. To ensure a fair distribution of wealth, we need to approach this change holistically and recognize that it won't necessarily lead to a complete restructuring of the economy.

While millennials will receive a considerable amount of wealth, economic policies and societal structures will continue to shape the economy. The wealthiest individuals and corporations will still control the economy, so we need to take a balanced approach.

It will lead to changes in the market and consumer behavior, but the extent of its impact is yet to be seen. So, buckle up and get ready for this ride - it's going to be wild!