India- Growth story

Market Update

The equity markets have had a strong start to the financial year- with FII (Foreign Institutional investors pumping in more than Rs. 3,885 crores.

The Indian stock market has been and will continue to remain supported by two main factors:

1. Total SIPs into the equity market are around Rs. 14,000 crores on a monthly basis
2. EPFO invests approximately Rs. 4,000 crores in equities on a monthly basis

This trend will continue as the total number of investors in equity markets will continue to rise.

Hence even in times of continued global pressure with relation to inflation and recession, the equity markets will be volatile but they are not likely to correct significantly unless the domestic investors stop investing.

In March 2023, India became the most populous country in the world beating China in March with the population at 1.428 billion as per a UN report.

The median age of the population is approximately 28.4 years, is a great asset to the country as they will produce and consume more goods and services, which would lead to economic growth is the great opportunity.

It has been very well established that population growth leads to a country’s economic development. Many countries like Singapore, Japan and a lot of European countries actually offer subsidies for people to have more kids along with tax benefits.

Lets look at the positives and negatives of increased population on the economic growth of a nation.

Advantages of Population Increase:

• Economic growth: A larger population can lead to greater economic growth because there are more consumers, more workers, and a larger market for goods and services. This can increase demand and stimulate business investment.
• Increased cultural diversity: With a larger population, there is potential for increased cultural diversity and exposure to different perspectives, ideas, and experiences.
• Greater innovation: With more people comes more opportunity for innovation, as there are more minds working on solving problems and developing new ideas.
• Increased tax revenue: A larger population means more taxpayers, which can generate more tax revenue for governments to invest in infrastructure, public services, and social programs.

Disadvantages of Population Increase:

• Strain on resources: A growing population can put a strain on natural resources, including land, water, and energy. This can lead to environmental degradation, pollution, and depletion of resources.
• Overcrowding: A larger population can lead to overcrowding in urban areas, which can result in increased traffic congestion, longer commute times, and a reduced quality of life.
• Increased demand for housing: With more people comes more demand for housing, which can drive up prices and make it more difficult for some individuals and families to find affordable housing.
• Social and economic inequality: As the population increases, it can exacerbate existing social and economic inequalities, particularly if resources are not distributed fairly or if there are insufficient social programs to support those in need.

The best investments would be in sectors that cater to the aspirations of young Indians. So, if you’re looking out to make new investments, do get in touch with us to help you decide the ones most suited for your based on your financial planning and existing asset allocation.