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Jun 10,2024
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India’s growth story is a captivating story of change, strength, and huge promise. From the shadows of colonialism, India has risen above economic, social, and institutional challenges. And unlike many developed nations facing economic slowdowns, India grows stronger. Healthy government finances and effective governance give India an edge globally.
This is the story of India’s ASCEND:
Attractive Market:
- Economic Pyramid Change: The country's demographics are shifting, with the upper middle-income population expected to double to 152 million by FY30. The most significant change is the reduction in lower-income households, set to decrease by 92 million from 134 million, marking a substantial shift in the income pyramid.
- Consumer Discretionary Growth: This shift in economic strata will likely spur growth in consumer discretionary spending. In emerging markets, $2,000 per capita has been the inflection point for discretionary consumption.
- Product Penetration: India has significant potential to increase penetration in products such as autos and air conditioners, where current levels are below 10%, compared to 15-60% in countries like China.
Strong Fundamentals:
- Healthy Bank Balance Sheets: Indian banks have very healthy balance sheets, with an overall capital adequacy ratio of 14% and gross/net non-performing assets at decadal lows of 3%/1%.
- Improved Fiscal Deficit: India's FY24 fiscal deficit improved to 5.63% of GDP, narrower than the government’s target of 5.8% and significantly lower than the 9.2% peak during COVID-19.
- High Tax Collections: Tax collections are at multi-year highs, with the Centre’s direct tax revenues budgeted to reach 6.7% of GDP in 2024-25, the highest in three decades.
Conducive Business Environment:
- PLI Scheme Success: The Producti
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