India to be the 8th richest place by 2017

India with its increasing number of millionaires is projected to be in the 8th position among the world's top 10 wealth centres by 2017, says a report by banking giant Barclays.

The report further says that emerging markets like India, China and Russia are fast catching up with the rich countries in terms of their wealth.

"Over the coming decade, the gap in wealth between the world's most developed countries and the leading emerging markets will continue to narrow with many new millionaires being created in India, China, Russia and other countries which are undergoing rapid development," says Barclays Wealth Report.

Moreover, by 2017 the four emerging markets-- India, China, Brazil and Russia-- will have so many millionaires that it would be inappropriate to call them emerging markets, Barclays added.

The second fastest growing economy India is expected to join the league of top 10 wealth centres by 2017 by that time its neighbour China is likely to move up to third rank from its present seventh place.

While Russia could experience considerable growth, moving to 11th place from 19th, Brazil will also move up the ladder to 12th from 15th.

The report says a sudden spurt in the wealth of emerging markets has displaced more developed economies such as Australia, South Korea and Portugal from the list. Australia's ranking fell from 10th to 16th, while South Korea dipped to 12th from 15th and Portugal came down to 34th from 25th.

In 2007, G7 countries -- Canada, France, Germany, Italy, Japan, the UK and the US  -- contained more than one million millionaire households.  By 2017, there would be 12 countries with one million USD millionaire households, the report said.

In India, there would be 4,11,000 households with wealth in excess of USD 1 million by 2017. The numbers of mass affluent, with wealth over $500,000, is expected to rise from a negligible figure in 2007 to 1.9 million by 2017, the report said.

The country's financial assets stood at $1.8 trillion in 2006, more than double its GDP, a higher ratio than that in Latin America, Eastern Europe or Russia, it added.

In long-term, India's "economic prospects look rosy, although there remain obstacles to growth, including poor infrastructure, trade barriers and a shortage of skilled labour," Barclays added.

The study further noted that in recent years the Bombay Stock Exchange sensitive index Sensex had risen six-fold over the past five years, and climbed by 47 per cent in 2007 and there has been a run of IPOs on the back of this.

The gross domestic product of India has grown at an average of more than 8 per cent annually over past three years making it the second-fastest-growing major economy in the world.

By 2017, it seems clear that the term emerging markets, which was first coined in 1980s will be an outmoded way of describing India, Brazil, China and Russia, Barclays added.

One of the main reasons behind the robust growth in this region is the development in the local capital markets of these economies.

In China, allocation to equities has increased from 10 per cent in 2004 to 16 per cent in 2007, in Russia it rose from 49 per cent to 66 per cent and in India from 60 per cent to 69 per cent during this period. While, allocation to equities in the US, UK and Germany has remained more or less constant over the same period.