- This is India’s Golden Decade
- Standing at the cusp of golden opportunities
- Structural reforms in place
- Recent Changes are not shallow, not short term but long term
- The impact will be major
- Outcomes won’t be arithmetic, they will be geometricity compounding
- Indian Economy – fundamentally we have built a character to grow on a sustainable basis – 7.5-8% growth or more (ups and downs in between)
- Durability of growth rate is there. Hence the impact of the same growth rate over longer periods becomes geometricity compounding
Lending sector –
- Sector in the pink of health.
- Sector has raised equity, debt levels modest, and asset quality squeaky clean.
- NBFCs also have the capability and strength to lend in a healthy way for a long period of time.
- Clearly in an era where 15-16-17% compounded lending volume growth is something that is going to occur for a long period of time and the lending system has infra to do it
- Balance sheets are strong
- Borrowers have also deleveraged balance sheets
- Borrower’s balance sheet – 0.75:1 was a debt to equity ratio, march 2020.
- March 2021 – Ratio has come down to 0.4:1, 40 paise of borrowings for 1 rs of networth
- Borrowers also have a sound balance sheet
- You can’t have economic growth with archaic payment systems
- Start-up revolution – 3rd largest ecosystem in the world, most vibrant and impact is threefold – new entrepreneurs, new innovation, and new business models
- Last 7 years – 53000 km of new roads, some of the roads and bridges are world-class
- Projects of complexity and character – not attempted in many other parts of the world
- Government has made its intent very clear – doesn’t want to run businesses or start new – will wind up its existing business – politically touchy subject so it will take their time
- Government not contesting or competing with private sector
- Govt. busy changing rules for it – this is important – this will unleash the biggest wave of entrepreneurship which is already there, and this will be enhanced more
- Twin effect of rising GDP and lowering logistics cost as % of GDP will lead to huge efficiencies, profitability booster, and competitiveness improvement
- Energy Blueprint – materially dependent on fossil fuels. Rapidly building a Renewable energy portfolio
- India today boasts of the biggest RE (Renewable energy) portfolio in the next 5 yrs
- Also biggest green hydrogen projects – 2 biggest green hydrogen projects are being built in India. The 2 biggest projects outside of India don’t have any tangible progress
- Whereas the 2 projects of India have also achieved Financial closure
- Systematically every major area of import and export – Govt has a blueprint to boost exports and reduce imports
- Hydrocarbons, edible oil, consumer durables – reduce imports
- In 4 years India has become the 2nd largest producer of mobile phones
- In the month of September alone – 1 bn $ of phones exported
- Transparency – RERA boosting Real Estate, GST boosting formalization, Insolvency laws ensuring efficient assets being utilized, faceless assessments, tech prowess
- Self Belief and confidence – Resilience, the way we handled the COVID crisis…..
