The Signal | India – The Next Wealth Driver

A lot has happened in marking an anniversary, quarter and a fortnight past the first sighting of the Covid-19. Addressing the many linkages in between is nearly impossible if attempted by words and barely possible if done so via pictures. What is addressable is the change in socio-economic behavior as is reflected in individuals focusing on wealth generation and not preservation, and institution recording recovery (growth) and not recession.

The graph below tries to encapsulate the emotions conveyed in text above:

The Indian’s Victory:

India’s Victory:

“When the going gets tough, the tough get going” is a fitting adage to describe India’s wealth growth in the midst of a once-in-a-century pandemic.

Adding credibility to notion above is Boston Consultancy Group’s (leading global consulting agency) report, titled “India Global Wealth Report 2021”. The writing’s below represent a summary of key learning from said report:

India’s grown financial wealth at the fastest rates across different time frames since the inception of the new millennium, vis-à-vis the world.

The table below highlights the India’s prowess as stated above:

India’s financial wealth grew from 2015 to 2020 by 11% p.a. to USD 3.4 trillion. Going ahead, it is expected to grow by 10% p.a. to USD 5.5 trillion by 2025.

India’s real assets grew from 2015 to 2020 by 12.1% p.a. to USD 12.4 trillion. Going ahead, it is expected to grow by 8.2% p.a. to USD 18.5 trillion by 2025.

India is prepping to lead from the front after riding in slipstream of the steaming Chinese economy for the better part of the previous two decades. Opting for pro-growth, inflation-expensive actions is expected to broaden the return covenants of Indian wealth boosters across the spectrum. The stimulation of demand from ground-up will be key in inducing supply chains as the grandest economic lever, once the vaccine triumphs over the vaccine.

In addressing India’s competitive prowess with the economy honing the largest population in the world, the dynamics paint the former with more fonder colors, as it looks to become the primary driver for all of world’s growth. This push is also set to help India become the more influential and impactful money maker amongst its neighbors within the world’s largest continent

The table below shows how India is on track represent higher share of the wealth generation potential amongst Asia-Pacific countries over the next five years:

In making the best of every situation, India has greased all the wheels to overturn the past pain of Covid 19 into future gains. Its managed to successfully devise the virus into a catalyst for the horizon-kissing economic bloom.

This comes at a particularly serendipitous time as India also carries the firepower to kickstart its growth journey, delivering benefit-maximum who choose to call shotgun in the ride.

The growth in investable surplus for India and Indians is presented below vs that of the world:

“The report reveals growth in prosperity and wealth significantly through the crisis and is likely to expand in the next five years,” an official statement from the consultancy firm said.

India is expected to lead the percentage growth of individuals with fortunes of over USD 100 million till 2025, it said, adding that the number will almost double to 1,400 in the next five years.

Indians’ cross-border wealth, which is defined as financial wealth booked in a jurisdiction that is different from the jurisdiction of domicile, grew to USD 194 billion in 2020 which is 5.7 per cent of the financial wealth. The proportion is set to increase to 6.3 per cent by 2025 as per its estimates.

On the asset allocation side, nearly half of the onshore deployment of the financial wealth is in currency and deposits, followed by equities and life insurance.

From a real assets perspective, which includes real estate, consumer durables and valuables like non-monetary gold and other metals valued at current prices, there was an over 14 per cent increase to USD 12.4 trillion in 2020, as compared to the year-ago period.”

As India readies to take top stand on the world’s podium, make sure to curate your portfolio by linking it to primary verticals in the nascent phase of this fuel-filled rally.

As always, we are excited to hear and elucidate your ideas/opinions on India’s growth story, so feel free to reach out to us via a plethora of our social handles.

Till next time, Happy Weekend