It has been a long journey, full of milestones since our Independence in 1947 – we Indians have a lot to be proud about. India, a nation characterised by its diversity, resilience and an ever-expanding horizon of possibilities, continues to capture the imagination of the world. As we celebrate India's independence, there are several compelling reasons why I maintain a positive outlook on India's future. From economic resurgence to technological strides, I am bullish on India in this era of historic significance. India's G20 presidency presents us with a platform to contribute in terms of our vision and plans towards building a better and sustainable future for the world.
The technology space has been one of the fastest-growing areas with constant innovation which has contributed to the growth of the Indian economy. We are making giant strides not only across the world but also into outer space in terms of our prized projects such as the Chandrayaan and Mangalyaan.
Fastest growing major economy: India is the third largest economy in the world behind US and China on PPP (Purchasing power parity) terms. India’s real GDP grew at 5.9 percent in 2023 (IMF estimates), twice the rate of growth compared to the world economy and 4X the rate of advanced economies. Factors such as the rise in capital spending across all sectors of the economy, the increasing levels of confidence, and visibly high corporate earnings in India all indicate that we are on track to surpass Japan and Germany to rank third on nominal GDP terms as well, shortly. Add to this the start-up space that is abuzz with investments, activities and growing employment opportunities.
Demographic dividend: According to the India@100 report by EY, India will have 1.04 billion working-age persons by 2030. Correspondingly, India’s dependency ratio would be the lowest in its history by 2030 at 31.2 percent. In terms of individuals that can contribute to various sectors of the economy, India is expected to remain the largest provider of workforce in the world, given the rapidly ageing population across developed countries. With the increased participation of women in the workforce, the size of the labour force has significant scope to expand further. This is a unique advantage for us. Further, our demography also provides us with the consumption power of a young population, towards discretionary expenditure.
Urbanisation and rising affluence: While India may have crossed the 1.4 billion mark to become the world’s most populous country, there has also been a steady growth in terms of the number of individuals moving to cities. Urbanisation has been a contributing factor towards improved economic performance. Indian cities are estimated to generate two-thirds of the nation’s economic output. It is, therefore, necessary to develop more urban destinations that will support livelihood, offer a better quality of life and increase the spending power of individuals.
Digitisation & India Stack – DPI: A world-class digital public infrastructure (DPI) has been developed by India as part of its goal to achieve sustainable development. DPI as it is called, is a set of digital applications, systems, and platforms, which are powered by interoperable open standards or specifications. India Stack is the collective name of a set of commonly used DPIs in India. There are three different layers to this. The first one is unique identity (Aadhaar), then comes the complimentary payments systems (Unified Payments Interface, Aadhaar Payments Bridge, Aadhaar Enabled Payment Service), and lastly data exchange (DigiLocker and Account Aggregator).
The benefits are tremendous in terms of real-time servicing, paperless and even cashless access to services of various kinds. It has also brought about efficiency in operations through a reduction in expenditure and has also been of great support in terms of reaching out to untapped segments. It paves the way for financial inclusion and above all supports the formalisation of the economy.
Start-up ecosystem: Globally, India has emerged as the third largest ecosystem for startups. Our innovation is across diverse sectors – IT, healthcare, life sciences, agriculture, education, food & beverages, etc. With technology taking centre stage across industries and financial support made available easily, there are more opportunities for young minds with fresh ideas to contribute in terms of new platforms and solutions.
Matured financial markets: We witness a much more mature financial market in India today. Despite the recent global economic turmoil triggered by the pandemic and accentuated by geopolitical tensions, our banking sector reported a gross NPA of 3.9 percent – a decadal low. HDFC merger has created the world’s fourth most valuable bank. Equity markets are at an all-time high. The insurance industry has also grown steadily. In the last few months, we have witnessed robust premium growth despite the recent changes in the tax exemptions on maturity for high-ticket policies.
All of these and more factors make for a strong growth story for India in the near and distant future. I am optimistic that these, combined with supportive policies will pave the way ahead for our country to shine in this special era of ‘Azadi ka Amritkal’.
Vibha Padalkar is MD & CEO, HDFC Life. Views are personal, and do not represent the stand of this publication.
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