India recently became the world’s fifth-largest economy, jumping six positions in the last decade. Leaving behind the UK within 75 years of freedom from British colonial rule is a big triumph. India’s growth rate has been the highest among the world’s leading economies, surpassing the United States growth rate. The current GDP of India is at approx. 285 lakh crores. Increasing consumption and better employment opportunities are supporting GDP growth. Some of the key indicators of India’s economic growth are as mentioned below:
| Performance Indicators | Percentage Growth |
|---|---|
| Private Consumption | 57.5% of the nominal GDP FY 2021-22 |
| Foodgrain Production | 2.85% higher than the objective in FY22 |
| UPI Transactions | Increased by 96.5% in FY22 |
| Number of Pradhan Mantri Jan Dhan Yojna Accounts | Increased by 7% in FY22 |
| Index of Industrial Production (IIP) | Increased by 1.7% in FY22 |
These are just a few indicators of India’s economic growth. Let us have a look at the main ingredients of this growth.
Start-Up Ecosystem and Entrepreneurship
India has 107 unicorns at present and is the third-largest start-up ecosystem in the world. The COVID crisis, which left many people jobless, acted as a catalyst for the growth of start-ups and small businesses. The start-ups and entrepreneurs came up with innovative solutions to address challenges during the pandemic. The changing business environment and an entrepreneurial wave have also led many people to leave their jobs to start their own businesses. The government’s initiatives of Startup India, Make in India and Skill development has further caused a shift in the people’s mindset, promoting a culture of innovation. These start-ups are attracting investors to invest money into new technologies and ideas transforming education, healthcare, financial investments, etc.
Evolving Digital Infrastructure
India has developed a countrywide digital infrastructure which is available to every Indian and has made a huge impact on the economy. The digital ID system AADHAAR has been a revolution in implementing all government welfare schemes eliminating all the middlemen. It helped make government scheme benefits reach the remotest location to the intended individuals without the involvement of any intermediaries. It facilitated the distribution of subsidies, relief funds through Jan Dhan accounts and all Direct Benefit Transfer(DBT) schemes to the needy in the most transparent manner.
Another landmark development is the introduction of UPIs, a step towards transforming India into a digital economy from a cash economy. It led to a manifold increase in digital transactions. These components enable the seamless delivery of financial services across the country.
Financial Technology
Financial technology developments in the last decade have improved financial inclusion by providing everyone with basic banking activities and other financial services. Jan Dhan accounts, AADHAR-enabled payment systems, DBTs and UPIs, are all a part of the financial infrastructure. New entrants like fintech companies cater to those segments which were not included in the traditional financial system, thus addressing the credit and investment gaps at low costs.
What Does Tomorrow Look Like?
The biggest strengths of India are its young population and the diversity of thoughts and ideas. The number of millennials in India is greater than the total population in the United States. With an average age of 26, young Indians are the engines of growth, driving creation, consumption and entrepreneurship.
Digitization and financial infrastructure are the key drivers in the development of entrepreneurship. These key drivers have unlocked numerous possibilities for growth in businesses across all sectors and, when combined with the government’s investment-friendly policies, make India’s future look promising.
Many experts predict that India will be a USD 25 Trillion economy in the next 25 years if we expect an annual growth rate of 8-10%.
And the best way to be a part of India’s growth story is to invest in India’s capital markets. You can invest in mutual funds if you are unsure how to invest in India. There are different types of mutual funds, and you can talk with us to create a financial solution that works for you and your goals.
