As you are aware, we’ve always been very bullish on the future of India.
We were growing despite not having a good leadership.
We now have an able and effective leadership as well.
According to FT data service, in the first half of 2015, India has become the number one FDI (Foreign Direct Investment) destination in the world.
According to World Economic Forum, in global competitive ranking, we have moved 16 places from 71 to occupy the 55th position.
Steep fall in global commodity (including crude) prices has put us in a sweet spot.
We have a great central bank governor. He was the key in pulling us out of 2013 crisis. Though rupee has fallen to dollar during the last 2 years, it has gained across every other world currency. Not only that when other emerging market currencies faced a rout against dollar, our fall was very less.
Rajan has been focusing on’ killing the inflation forever’. From double digits two years ago, CPI inflation is expected to stabilise at 5.8% in January 2016 and at 5% in March 2017.
Interest rates have been falling and are expected to fall further in the medium term. It would not be a surprise if we become a low inflation and low interest rate economy earlier than expected.
FD rates are around 7.5% and may fall even to 6% in next 2 years in line with above.
Small savings interest rates also would start coming down.
Equities tend to do very well in the falling interest rate scenario. Debt oriented funds like MIPs also would do well over next 3 years.
Prime Minister wants us to focus on becoming a $20 trillion economy from the current $2 trillion. I’m confident that this would happen over next 2 decades.
Our GDP per capita is a meagre $1600. Even China’s per capita and GDP is 5 times that of ours.
We are growing from a very low base and hence would grow at a higher rate for next 2 decades to come. If one can have right temperament, be patient and stay the course; investing in Indian equities is a no brainer.
Equity mutual funds would deliver phenomenal returns in the decades to come and we are moving forward in the right path.
All that is needed is participation in the journey and staying the course.