[h=1]There are just 18,359 (taxpaying) crorepatis in India[/h][h=2]Consumption and spending data for the year, especially of luxury products, shows how deceptive these numbers may be and blows holes in the government’s official estimate of the number of taxpayers.[/h]
JUST 18,359 individuals — barely a quarter of the number of people who visit Select Citywalk Mall in the capital on a Saturday — reported annual earnings of Rs 1 crore or higher in 2011-12 and paid tax on it, according to income tax data released last week by the Finance Ministry.
Consumption and spending data for the year, especially of luxury products, shows how deceptive these numbers may be and blows holes in the government’s official estimate of the number of taxpayers.
For instance, just four luxury car makers, Audi, BMW, Mercedes-Benz and Jaguar-Land Rover, reported sales of 25,645 units in 2011-12 of cars having an average price tag of Rs 40 lakh each.
That year, in Mumbai, an estimated 1,880 luxury apartment units in the price range of Rs 10 crore-Rs 100 crore were reported to have come up for sale.
Or that just one luxury product mall, Delhi’s DLF Emporio, reported revenue from operations at Rs 113 crore and net profit stood at Rs 61 crore in 2012-13 (data for 2011-12 was unavailable), almost entirely from the sale of high-end luxury products such as watches, bags and apparel.
The government’s estimate of 18,359 assesses reported to be earning Rs 1 crore or above corresponds to just 0.06 per cent of the total 28.7 million individual tax assesses, according data made public by the government until assessment year 2012-13 (financial year 2011-12).
Considering that there were 814 million people eligible to vote in the 2014 Lok Sabha election, an academic tax payer-voter ratio translates into there being just one taxpayer for every 28 voters (if latest voters data from the 2014 general elections were to be used).
Estimation of wealth in India based on spending data underlines the discrepancy.
For instance, a 2013 Kotak Wealth Management and CRISIL report titled ‘Top of the Pyramid’ estimated the number of Indian ultra-high net worth households — each with a minimum net worth of Rs 25 crore — at 81,000 in 2011-12, a growth of 30 per cent over the previous year.
This number is broadly corroborated by the 20 per cent annual rate of growth reported in the Indian luxury market, according to retail consulting firm Technopak’s The India Luxury Outlook 2011-12
“The number of 18,359 for those reporting income of Rs 1 crore plus looks like an understatement because it does not link well with other data such as the sales of only luxury cars. Similarly, even if you look at business-class airline travel, or hotel occupancy, the number of 1 crore-plus income seems to have been understated 10 times, if not more,” said Arvind Singhal, Chairman of Technopak.
India’s luxury market, he said, is valued at around $75 billion, with about $10 billion spending in premium jewellery segment, around $3-4 billion in handbags, footwear, apparel, skincare and around $5-6 billion in the luxury furniture segment.
Apart from the DLF Emporio in Delhi, there are at least three other exclusively luxury malls, the Palladium in Mumbai, The Collection-UB City in Bengaluru and New Bergamo Mall in Chennai, which cater entirely to luxury brands such as Armani, Louis Vuitton, Estee Lauder and Versace. “Clearly these malls would not be operationally viable if the clientele is limited to just 20,000 people,” an executive with another consulting firm said.
This is further corroborated by a 2012 survey conducted by Mastercard, which reported that more consumers in India were planning to buy luxury goods over the next year than in any other country in the Asia Pacific region, apart from Singapore — where the per-capita income is more than 10 times higher.
- See more at: http://indianexpress.com/article/in...epatis-in-india-2781532/#sthash.2HFCSMRz.dpuf
JUST 18,359 individuals — barely a quarter of the number of people who visit Select Citywalk Mall in the capital on a Saturday — reported annual earnings of Rs 1 crore or higher in 2011-12 and paid tax on it, according to income tax data released last week by the Finance Ministry.
Consumption and spending data for the year, especially of luxury products, shows how deceptive these numbers may be and blows holes in the government’s official estimate of the number of taxpayers.
For instance, just four luxury car makers, Audi, BMW, Mercedes-Benz and Jaguar-Land Rover, reported sales of 25,645 units in 2011-12 of cars having an average price tag of Rs 40 lakh each.
That year, in Mumbai, an estimated 1,880 luxury apartment units in the price range of Rs 10 crore-Rs 100 crore were reported to have come up for sale.
Or that just one luxury product mall, Delhi’s DLF Emporio, reported revenue from operations at Rs 113 crore and net profit stood at Rs 61 crore in 2012-13 (data for 2011-12 was unavailable), almost entirely from the sale of high-end luxury products such as watches, bags and apparel.
The government’s estimate of 18,359 assesses reported to be earning Rs 1 crore or above corresponds to just 0.06 per cent of the total 28.7 million individual tax assesses, according data made public by the government until assessment year 2012-13 (financial year 2011-12).
Considering that there were 814 million people eligible to vote in the 2014 Lok Sabha election, an academic tax payer-voter ratio translates into there being just one taxpayer for every 28 voters (if latest voters data from the 2014 general elections were to be used).
Estimation of wealth in India based on spending data underlines the discrepancy.
For instance, a 2013 Kotak Wealth Management and CRISIL report titled ‘Top of the Pyramid’ estimated the number of Indian ultra-high net worth households — each with a minimum net worth of Rs 25 crore — at 81,000 in 2011-12, a growth of 30 per cent over the previous year.
This number is broadly corroborated by the 20 per cent annual rate of growth reported in the Indian luxury market, according to retail consulting firm Technopak’s The India Luxury Outlook 2011-12
“The number of 18,359 for those reporting income of Rs 1 crore plus looks like an understatement because it does not link well with other data such as the sales of only luxury cars. Similarly, even if you look at business-class airline travel, or hotel occupancy, the number of 1 crore-plus income seems to have been understated 10 times, if not more,” said Arvind Singhal, Chairman of Technopak.
India’s luxury market, he said, is valued at around $75 billion, with about $10 billion spending in premium jewellery segment, around $3-4 billion in handbags, footwear, apparel, skincare and around $5-6 billion in the luxury furniture segment.
Apart from the DLF Emporio in Delhi, there are at least three other exclusively luxury malls, the Palladium in Mumbai, The Collection-UB City in Bengaluru and New Bergamo Mall in Chennai, which cater entirely to luxury brands such as Armani, Louis Vuitton, Estee Lauder and Versace. “Clearly these malls would not be operationally viable if the clientele is limited to just 20,000 people,” an executive with another consulting firm said.
This is further corroborated by a 2012 survey conducted by Mastercard, which reported that more consumers in India were planning to buy luxury goods over the next year than in any other country in the Asia Pacific region, apart from Singapore — where the per-capita income is more than 10 times higher.
- See more at: http://indianexpress.com/article/in...epatis-in-india-2781532/#sthash.2HFCSMRz.dpuf
