Higher birth rate which was rated once as hindrance for India’s growth has turned out to be a boon now. While India continues to add more to the world population than any other country does, it is accompanied by an increase in the proportion of working age component. And the dependency ratio in India has fallen to 56 per cent in 2010 versus 65 per cent a decade ago, and is expected to go below 50 per cent over the next decade.
In contrast, China's dependency ratio is expected to increase from 39 per cent to 45 per cent over the next decade, suggesting that the high economic growth in China has actually peaked out.
Domestic consumption on the back of favourable demographics is the key driver behind India's growth story, with around 80 per cent of India's GDP being consumed within the country. Some of the sectors that can benefit out of this consumer boom would be FMCG, pharmaceuticals, automobiles, banking and finance, etc. These sectors will show higher than average sectoral growth rates.
As Indian families go nuclear there will be an increased demand for housing, consumer durables, automobiles and financial services. Urban Indians have emerged as major spenders with things like vacationing, branded clothes, investing on new gadgets and buying the latest car. Meanwhile, the rural demand for goods and services is also growing at a scorching pace. As the entertainment-internet revolution spreads further to the rural areas, there has been a direct impact on rural consumer demand. Amid the changing lifestyles of the Indian rural class, which form 70 per cent of India's population, bullock carts are being replaced by tractors, and bicycles are being replaced by motor cycles.
The changing demographics of India present a wonderful opportunity to the nation to rise from decades of poverty. For the marketers it provides a mouth watering opportunity to cater to the needs of 1.1 billion aspirational Indians, while for the foreign investors it provides a fantastic window of opportunity to the last big emerging economy which should touch a GDP figure of $5 trillion in the time to come.
Summary of this article : The world is investing in India, ARE YOU INVESTING IN INDIA? Stop doubting. Start Investing.
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