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What is the future of Indian Economy? Is it our decade?
If everyone around you is saying that this decade belongs to India and there are discussions about it being India’s golden time, you might also feel the same way that education, medical, IT, and the overall vibes of Digital India have changed.
But you don’t understand why? and how much truth there is in these conversations?
In this article, you will be able to smartly present points in front of everyone explaining why this is India’s decade. It will also improve your knowledge of geopolitics and macroeconomics.
We strongly believe that this decade belongs to India, but as the CEO of McKinsey says, this century belongs to us.
Below indicators will help you build your economic and national knowledge, and this will be the reason for witnessing a bull run in the financial markets. So let’s get started.
Let me ask you a question: In which family do you think there are higher chances of a new business succeeding? A family where everyone is young or everyone is old-aged? I guess you already understand that our first indication is towards the demographic dividend of our country. According to data, 69% of the population in 2030 will be 28 years old. What they will bring to the table is entrepreneurship, innovation, jobs, employment, and more. So the country will be in good hands.
However, if the youth lack resources, it may not translate into anything substantial. Taking the previous example, suppose there is a young man in a family who is productive and efficient but lacks capital. In that case, the chances are high that he will engage in fulfilling his family’s needs rather than investing in innovation and startups. But at present, India has the highest circulation of money. Cash circulation has grown at a Compound Annual Growth Rate (CAGR) of 11% from 2014 to 2023. In the past five years, it has grown at an annual rate of 14%. Currently, there are 31 trillion rupees in circulation. And we can see the impact of this on consumption.
How is that so? Among all the people taking loans, the highest percentage is for home loans, which amounts to 48%. People build homes when they have money, when their consumption increases. Also, we can see that India is still playing it safe. Credit card loans account for only 4%, which is a good sign. In the US, people are even taking groceries on credit.
Another sign of a consumption-driven economy is the increase in digital retail transactions. The leakages in the system have been plugged with the help of Aadhar cards and Direct Benefit Transfers, which identify the beneficiaries and deposit money directly into their bank accounts. This way, we have saved $27 billion by preventing leaks in the system. Additionally, demand-supply growth has been consistent in every industry for the past four quarters, leading to the highest GST collection in April 2023. Rental yields have also improved, and with the circulation of cash, consumption, and people’s lifestyles, the wave of entrepreneurship in India is quite strong.