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India in next decade: 2021-30

 India in next decade: 2021-30




Hi readers, 

First I want to say all of you thank you for connecting with me through my blogs. This is mid August of year 2020, just four and half month left of 2nd decade of 21st century. India observed this decade which start with slipped in GDP growth to 6.6% in 2011 from 10.3% in 2010. Then in 2014 observed political change, Mr. Narendra Modi led government forms in centre by NDA with clear majority. Government came out with 2 major decisions (Demonetisation and GST)  in short span which hurts MSME sector of country. Real Estate and Automobile sector started under performing. Sales of both sector declined sharply in short period of time. It is clear indication of two things one is people loosing Trust and second is declined in savings and income of consumers in country. Now we heading towards end of this decade with pandemic of COVID-19. At Initial stage of pandemic country went under lock-down which leads to disruption in supply chain. Now when I wriiting this blog I heard news about 1 Crore people lost job since start of pandemic as per EPF data, this figure just showing picture of formal job market. So many people having no idea about what will we face in upcoming months or in year. here you will get some idea about picture of next decade.


A young India, with a large digitally enabled middle class is seeking growth and change. For innovation youth needs to build skills and capabilities, the nation risks stagnation. However if we came up with capabilities for growth and new solutions, the opportunities are limitless. For long and sustainable growth in economy needs some pre-requisites like Stable political system, abundance of natural resources as well as human resource, hassle free clearances to businesses, simplified tax system etc.  Recently government launches mission of becoming 5 trillion economy by 2025, to attend this target some key sectors like Digital connectivity, financial services, healthcare, power and education will play major roles.

There is simple logic when consumption growth pick up ultimately growth in manufacturing also picking up which resulted growth of GDP.  As per study project by WEF collaboration with Bain & company, India is one of the fastest growing economy in the world. By 2030, it is on the course to witness a 4 times growth in consumer spend. It will remain one of the youngest nation with 1 billion internet users. In upcoming years we will observed high growth in consumer spending and credit growth, this mean credit card and Goods financing business will flourish. ICICI, Axis, HDFC will be main players in this business also there will chance one or more start up come with innovative idea in this sector. 

By 2030 India will move from being an economy led by the bottom of pyramid, to one led by  the middle class. Nearly 80% of households in 2030 will be middle income, up from about 50% today. The middle class will drive 75% of consumer spending in 2030. 



Below is some major consumer groups-
  1. Poor Rural
  2. Poor Dreamers
  3. Young and tech savvy(All born post 1990)
  4. Middle India
  5. Connected aspirants
  6. Conservative rich
  7. Sophisticated rich
(Above classification not discriminating anyone it is just study purpose)


India shifted directly from Agrarian economy to service oriented economy by skipping development in manufacturing sector. Now fourth industrial revolution will give chance to us to correct that mistake and to strengthen manufacturing sector also. Currently India have lowest corporate tax in the world. Recent tension between US-China trade war and other countries which have disputes with China may chances to move there manufacturing plants to India and south-east Asia.  For that purpose India needs to implement programs such as Skill development, Make in India Effectively.


Seven key predictions for the future of consumption in India in 2030


Below image will show you consumer spending areas so that can identify companies which will provide products and services for particular area that help you to choose companies for investment. 
  


Firms of the future in India

Below is some points which fulfilled by companies and grow their business

  • Unlock consumption's through inclusion voice, video, vernacular and 'mobile first' opportunities.  Eg. Hotstar, Amezon prime
  • Innovate for India Eg. Paytm, Phonepe, Gpay
  • Build transparent,uniform customers experiences Eg. Amazon India, Flipkart, Indiamart, Avenue supermart
  • Ensure agile and entrepreneurial decision making. Eg. OYO rooms, BYJU


Solving problems across sectors

 
Finding company to invest means finding a company which provide solution to some of country's most persistent problems. As the country  transforms, these must be vectors of growth not weights slowing the country's rise.

  • Healthcare: Rising life expectancy needs advance healthcare companies
  • Education: Keeping children in school need Educational service provider companies
  • Financial services: More inclusion of peoples will grow this sector
  • Digital connectivity: Data and tech services provider companies
  • Power: more and better power to more peoples
  • Retail: Increasing market share of organised retail
  • Agriculture: Improving productivity yield needs best pesticides and other things
  • Manufacturing: Electronic equipment to human ease
  • Urbanisation: Modernising urban areas
Above will be potential sectors for developments so there is many opportunities to invest in such companies stocks.

In this blog we just overview Goods & service providers and consumers opportunities, certain groups of future consumers.  We will see detailed sector-wise analysis in upcoming blogs. This series of blog under name 'India in next decade: 2021-30' will be continue till December 2020.



Mayur Jagtap

Investment Consultant.


Sources: 
  1. World Economic Forum repots
  2. www.pws.in
  3. livemint newspaper 
For regular and daily small update 
  





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