The world looked different over 25 years ago when I was still in school. I grew up in a small city with my parents and spent all holidays and summer vacations in a village with my grandparents.
Travelling from the city to the village was a task and involved multiple hops, including crossing a river on a boat.
People did not use phones. So farmers discovered the price only after travelling a couple of hours on some fixed days when Mandi was set.
There was only one English medium school that I was fortunate enough to attend.
Change For The Better
Today when I visit my native, I feel no nostalgia. Because it is not what it was. For good.
Roads and bridges have reduced travel time significantly. Two-wheelers and mobile phones with the internet have changed how farmers work, and small businesses do business.
People no longer stare at you if you speak a sentence in English. Hospitals are more in number and more advanced. Schools are competing by providing a better quality of education.
Long-term changes can be noticed in the short term. You don't need to read the reports to notice the difference, but people with an analytical bend like to see growth numbers.
India is compounding in the range of 6-8 percent. That would be by far the fastest-growing country of a meaningful size.
In the book Snowball by Alice Schroeder, Warren Buffet says – "Life is like a snowball. The important thing is finding wet snow and a really long hill."
India is that "really long hill" with a lot of wet snow. There are three reasons why India is likely to continue compounding for the foreseeable future – exploding digital and physical infrastructure; policies favouring a move from unorganised to organised, alongside efforts on ease of doing business; and the entrepreneurial people in the country.
A lot has been written about these recently. And there are tens of reports citing India's growth. However, there are a few pointers I would like to bring up.
Unlimited Possibilities
First, we need to look beyond apparent markets. Some folks, whom I respect a lot, talk about how shallow the Indian market is, citing the number of taxpayers and the concentration of wealth.
We should remember that businesses like HUL and SBI are built on the same base of customers. HUL has multiple products that cater to 100 million-plus customers, with one of their brands even crossing $1 billion-plus in annual sales – all from India.
All of these customers may not be paying taxes, but they do buy products worth enough to create a Rs 6 lakh crore company. Mega cap companies like HDFC and Bajaj Finance are built on 50 million-plus customers.
When India becomes a $10 trillion economy, these large-cap businesses will become even larger, but there will also be many small-cap businesses that would become large-caps.
Technology Our Best Friend
Second, technology (Renewable, EV, Semiconductor, AI) will be our best friend in growing the wealth of India. Money will flow to India to access entrepreneurial ventures and growing skill sets in India. Consumerism will transfer some of it to the lower segments of the pyramid.
Savings will be deployed in capital markets, further funding local entrepreneurs, creating wealth. And technology is going to oil this machine with a positive feedback loop. Technology is the wet snow of our "really long hill."
Third, we need more positivity towards entrepreneurship. Startups have made a difference in India. Most of the time, we discuss startup funding or shutdowns but ignore the change they are bringing.
Flipkart ensures someone in a Tier-3 city can buy what they want. Zomato and Swiggy clock close to three million orders in a day. E-commerce and food delivery have created millions of jobs. For years, most of the wealth in capital markets was built by foreign institutions. But today, millions of SIPs are happening online – the middle class is participating and compounding wealth.
The cost of innovation is failure. And a lot of startups will fail. Can we make it okay to fail without sarcasm?
Bet On India
Lastly, and most importantly, the Government and regulators are unlocking a lot of levers in terms of public infrastructure that will act as a force multiplier to what entrepreneurs have been building. We are seeing how UPI is creating an ecosystem around money flow.
It has become a role model for other countries. ONDC might do the same for e-commerce. I can't imagine us starting and scaling Groww if not for Aadhaar, eSign, and Digilocker. Recently RBI talked about frictionless credit delivery used in Kisan Credit Card will be available for other loans, enabling financial inclusion.
With so many transformational changes happening around us, who wouldn’t want to bet on India.
Lalit Keshre is Founder and CEO of Groww. Views are personal, and do not represent the stand of this publication.
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