A headline which caught my eye today and a cause for celebration for India and people of Indian origin was this report from the World Economic Forum site.
The chart on this link gives such a concise view of how the break-up of the $80Trillion world economy looks like.
While US is still the largest economy at $19 trillion, China at $12 trillion, is closing in quite fast and is one of the reasons for the spat between US and China.
What needs to be understood that China has a huge population and even a small change in per capita can change the numbers for China dramatically.
Which brings me to India. In one of my posts almost 6-7 months back I had written how the Indian economy can grow dramatically because of the things the government of India is doing in terms of Direct Benefits Transfer and for doubling of farm wages. With India’s large and growing young population even a $100 increase in per person income, from $1700/ person, can cause us to cross Germany, Japan etc. in a matter of years.
One of the BigFive consultants had put out a report of countries in terms of their share of the economy in 2050. And the top 3 economies had India in it. While we have only $2.6 trillion portion of the global economy we are still the fastest growing large economy.
Which brings me to the crux of this post….
While Warren Buffet is betting on the USA and I am not negating him…. I also do have some indirect exposure to the US market…..
I would think if you really want to grow fast, you need to invest in an economy which has the world’s largest democracy. Irrespective of which government comes to power, the economy moves on……there might be some slow downs but India has both the brain power and the manpower to surge ahead. Being a stable democracy there is a rule of law. So companies do get stuck in legal hassles but things do get resolved
By 2030 we would have the youngest population in the world. That will mean the amount of consumption that can take place in this country will be unsurpassed. With both men and women entering the workplace either directly or indirectly, the need for workplaces will grow and it will put pressure on our existing infrastructure. Which means that the government will have to be investing in setting up new cities. The Delhi-Mumbai industrial corridor – being built with Japanese collaboration – is going to sprout more than 10 completely new living and industrial areas.
To transport the population you will need to have airports, roads, airlines. To treat such a large population you will need hospitals, medicines etc. There is no field where growth will not take place at amazing rates.
If you can take ownership of businesses via mutual funds or direct equity investments invest in India. The growth is just about to begin and if you buy into companies at this time you can ride this growth. If you want your wealth to grow faster than anywhere else in the world put your money in India.
To your financial independence.