Indian Economy My View

Why Invest in India?

Global economy scenario is a bit vague at current situation but this should be considered as an opportunity to invest for the long term, those who have liquidity. Am sure many of you are confused that where should we Invest? Answer is INDIA. It is not just because i am an Indian citizen but currently if we compare developed and developing countries, India has the most favorable factors to outperform in next 5 years. Now, you guys would say that if world economy is fragile, India would not grow too. But i am going contrary to this statement as i believe we have so many domestic factors that are going to lead our economy. I am trying to list down few points which i feel are positive points or may say booster to our economy.
    • Government with Vision: NDA in center this time is most differential with all past government strongly on one point which is, it has vision for changing India. I am not politically against or for any government, but what i feel different about this government is that it  has initiated many ways to change India at same time. Ofcourse previous governments too took steps to change india, but this time they are going with Digital world which is helping to reach out large pool of people at one time and also making work quit easy for departments to manage data. So biggest game changing for this government could be Digital India campaign, more than even any other change because it is connecting people and also its making  information available to citizens easily. With Make In India campaign, government is trying to support all sectors of India and its also boosting on Exports. I may go down to write endless pages, if i mention all the points of visionary government but in short to say,if we see even 35% change than current situation, its going to change India in alot better way. So i have faith in this government!!
    • Youth Population: As per the UNFPA’s 2014 report, India’s 25-30% of total population is Youth between 10-24 of age which i believe are going to spend the most in coming decades as they are going to be next work force who will earn. In terms of total population, India is the second highest and so a simple math would suggest that atleast we are going to stay in top 5 country to have youth population in next decade. Even as per CIA report 2015, India birth rate is far more than China, Australia, USA or say any other developed country. Considering this angle of economy, other factors remaining constant across countries, Multi national companies would surely choose India as its destination for manufacturing. To add to this, Indian Government, Led by Modi, has initiated a programme, SKILL INDIA to create a ecosystem to train labors across India through training partners. So am sure main blood for economy to prosper is always human and stats says India is going to be most preferred.
    • Change in Workforce: It could be considered a continuation of above point but there were two things which i wanted to mention here which was China, who has largest workforce, is losing in numbers where as India has added 366 million in last decade as suggested by articles in leading magazines. This could be the biggest example that youth population of our country is joining skilled labor more than agriculture. So this is surely changing our demographic. Secondly, women workforce is increasing in India which could increase demand of various products in next decade as they would have purchasing power. Until recent or even still many families have tradition of housewives but now as more and more girls are completing their graduation, they prefer to stay working even after marriage. Though still many families doesnt allow to work but thought is changing at rapid pace. This will surely push more women in labor market. Now how this is positive for India? Its simple logic…As now women would earn themselves, they dont have to be dependent on Husbands to fulfill their demands for luxury products. This  will raise demand for clothing, jewellery, cosmetic etc and the money will keep circulating in economy. So i Feel even this could play part in changing India.
    • Untapped Rural markets: As per the census report of 2011, India’s approx 68.84% population stays in rural while just 31.16% are living in urban. That number has improved from previous 72.19% in 2001 so we can assume that this number could max be revised to 60% in coming census . Which means still more than half of India is going to stay in rural in next decade. That also concludes that halve of our population is dependent on Agriculture. But interestingly, if you guys notice around you, we are witnessing major change in vision of rural people. Until before 2 decades, it was by default assumed by a farmer’s son that his future is going to be farming, but now the scenario is different. Now 50% of farmers want their children to be a doctor or engineer or even a chartered account. What has brought this change? Awareness!  Today Digitization has made it possible for information to be available at each and every corner of the world where there is Internet. As we are having largest pool of mobile users, even internet is reaching  each part of India, which is bringing awareness in Rural India. People there are getting informed of Education, Products, Jobs etc. This is creating demand of each and every type of products and services in Rural. As Food inflation is rising so is income of rural india. This states that when urban people are into somewhat liquidity crisis, rural people have purchasing power as money has been transferred to rural india by the way of food inflation and real estate inflation. On opposite, they havent spent at the same pace as they earned because they were unaware of spending option until now. But now Internet have educated them. In next decade they would demand say Electric appliances, Education services, etc more than urban in term of sales growth. So untapped rural markets is biggest advantage of India currently.
This were 4 basic points which are  creating biggest opportunity to invest in India for next 5-10 years. Ofcourse there are many other financial factors and commodity factors such as lower crude oil price which are also going to play crucial role for growth but that is common for many developing countries. While 4 points which i mentioned are unique advantages of India over developed countries and developing countries so i feel we should STAY INVESTED IN INDIA OR START INVESTING! Where and how should you invest within India, is upon you to decide. You may take advise of your financial consultant and work the best investment opportunity as per your goal. So my formula for next decade is I.I.I (Invest In India)
Disclaimer: All the views are personal and the actual figures may differ. I am not biased to any political view. Please refer to you financial consultant before investing on my idea. This is purely what i think.

3 thoughts on “Why Invest in India?”

  1. I appreciate this blog by luvkushfinserve. I have a couple of points that may counter some of the arguments here. Firstly, let me confess that I am proud to be an Indian and extremely excited to be a part of its growth story. But the growth process would not be that straight forward and these are my thoughts.

    1) India’s demographics is the most positive thing but can it lead to desirable employment is questionable as there is a wide gap in skill requirements. Skill India program has to be considerably upscaled.

    2) Secondly, more and more automation is gradually reducing the need for labour and replacing it with capital. In these circumstances, employability of such a large pool of labour would be difficult.

    3) At the same time, IT, which was once the largest absorber of jobs in organized sector seems to have slowed down. Which other industry has the capacity to absorb 120 MN jobs which are expected in the next decade?

    4) While rural India is untapped, the purching power is mainly dependent on the regularity of monsoons on which nobody has any control. Also, while Agriculture accounts for more than half of our population, it’s contribution in India’s GDP is only about 15%. So, there is a lot of mismatch here. It implies that the schemes like NREGA will have to be continued to support rural growth.

    At the same time, I continue to support the view that India has great investment potential provided it addresses some of these structural issues attentively.

    I am hopeful, it will.

  2. I appreciate your views sir.. I believe there are always two sides to coins!! the win on the toss depends on which side you select and only time can let you know who wins!! so i am supporting the brighter side of Indian economy and i thought we are improving and we are gonna be at least a inch forward than what we are today..But i truely agree and respect your points!!!

  3. Indeed good one…i also accept that with such a rooted change in Indian economy will surely be helpful to both industrialists and general people.

    Global concerns have dragged down the overall sentiments but domestic fundamentals are intact.

    With favourable valuation, stock market offers good opportunity for long term investors to build their portfolio.

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