Investing in the "India" story !! Revealed !!

The country must overcome many Economic, Social and Political problems before it can be considered as a "Super-power".

"Yes" like any other country in the "World", "India" has a few problems of its own to deal with before it can steal that coveted "Super-power" tag from a "Behemoth" like USA.

Also, it has to compete fiercely with "China - The Dragon" in order to achieve that.

To understand the complete "Big picture", we have to understand where "India" is coming from, where "It" is, What needs to be done & then we can talk about Where it is headed".

• When "India" declared its independence in 1947, its GDP was a mere 2.7 lakh crore rupees, accounting for a paltry 3 % of the world's total GDP. As of Fiscal year 2020-2021, the "Indian" economy was clocked at over 125 lakh crore rupees. That is a 42 multiple jump since its Independence 73 years ago.

• Thought to only be a land of "Snake charmers" till few years back, "India" has taken many leaps forward in terms of Pharmaceuticals, Technology, Infrastructure and Space exploration.
  

"India" in terms of "Sectors" :

• "Agriculture" - Constitutes only 18 % of the Total GDP at "Current prices" and employs 53 % population of "India".

• "Industrials" - It includes "Construction, Water supply, Gas, Mining & Manufacturing". It is contributing about 30 % of the Total GDP at "Current prices".

• "Services" - This sector has become the "Backbone" of "Economy" and given the statistics of population it makes sense as-well. It is currently contributing 52 % to the Total GDP.

Let us talk some "Numbers" :

• Average per capita income of an "Indian" is only 1850 $ per year.

• Estimated "National savings" for the year 2019 were 940 billion dollars.

• Fiscal year 2021, the fiscal deficit is pegged at 18.4 lakh crore rupees or 9.5 % of GDP.

• The "Trade deficit" with China is at 45.9 billion dollars, down almost 11 billion dollars as compared to last year.

• The "Current account deficit" stood at average of 2.2 % of GDP.

• The "Debt" stands at around 80 % of GDP.

• The "Market capitalization" is at 104 % as compared to the GDP.

• Forex reserves stand at all time high of 580 billion dollars.
  

Challenges for the Economy :

• Poverty - As per the "World bank poverty line", the rate declined to 37 % in 2018-2019 from 57 % in 2011-2012.
  

• Unemployment - The rate is clocked at 7 % but many say that it is in the "Formal sector" otherwise the rate is a bit higher.
  

• Education - Literacy rate stands at 74 % but the percentage of skilled workers is lower.
  

• Healthcare - India stands at "42 rank" in the "World healthcare ranking index" and for private treatments the cost has gone significantly up.
  

• Rising "Inflation" - When combined with weak demand, the unemployment figure does not paint a very rosy image at the moment to be honest.
  

• Weak demand - Overall "Consumer confidence" is shaky as the country is dealing with numerous challenges.
  

• Lack of "Fiscal stimulus" - Due to the concern of widening "Fiscal deficit".
  

• Corruption/ Black money.
  

• Lower than needed "Tax collections" - Salaried middle-class is bearing the burden of both "Rich & the Poor" on its shoulders. Many people refrain from "Honestly paying taxes".
  

• Average "Infrastructure". Projects showing "Cost over-runs".
  

• Poor "Air & Water quality".
  

Factors in Favor :

• The journey of "Sensex" from 100 in 1978 to 50,000 in 2021.

• Increasing "Domestic investor" participation in the "Stock market".

• Steady FDI (Foreign Direct Investment), FII (Foreign Institutional Investors) & FPI (Foreign Portfolio Investors).
  

• Recent spurt in minimum wages intended to increase the "Personal disposable income" to boost "Consumerism".
  

• Shift from "Agricultural sector" to other more productive sector's of the "Economy".

• Among "World leader in Milk, Sugar, Information technology".

• Focusing on "Renewable energy".

• Large young enthusiastic population leading to no shortage of workforce/ manpower.

• High percentage of "Salaried middle-class people".

• Diverse geography.

• Foreign language skills.

• Good foreign relations.

• Mass transit system.

• Tourism.

• Powerful "Army, Airforce & Navy". Equipped with "Nuclear weapons".

• Focusing on Social unity.

• Working on literacy & skill development.

• Focusing on Healthcare & Infrastructure.

• Habit of "Savings" now turning into "Investments". 

• Urbanization.

• Shift of workforce from "Un-organized" to the "Organized sector".

• Focusing on "Manufacturing & Services".

• Global brands entering "India" should help in "Job creation".
  

Sectors likely to benefit going forward :

• Exports.

• Banking, Finance & Financial services.

• Online education.

• Low cost services.

• Automobiles.

• Real estate/ Construction.

• Renewable energy.

• Water supply.

• Gas.

• Metals & Minerals.

• Media & Entertainment.

• Information technology.

• Biotechnology.

• Gaming.

• Fast moving consumer goods.

• Consumer durables.

• Pharmaceuticals.

Economists & Scientists both agree that in this Century, we will see more Technological advancements than we saw in the past 500 years.

More insights are available in the books like "Wealth of Nations", "Capital in the 21st century" & "The Great Super-cycle" where Top economists have said based on their research and analysis that if 19th century belonged to the "British", 20th century belonged to the "USA", late 20th century belonged to "China", then the 21st century surely belongs to "India".

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