A US-based think tank World Population Review has come up with a report on the open market economy and it’s something to cheer about for India. As per the report, India has emerged as the world’s fifth-largest economy overtaking the likes of the UK and France who previously were ahead of India during 2019.
The report states that the Indian economy is now valued at $ 2.94 trillion whilst the GDP of the UK and France stands at $ 2.83 trillion and $ 2.71 trillion respectively. It further illustrates that the purchasing power parity (PPP) of India is now at $ 10.51 trillion which puts them ahead of Japan and Germany.
However, when it comes to GDP per capita it stands at $ 2170 for India. For a brief comparison, the US has $ 62,794. The real GDP growth of India is also currently on a downfall and is expected to weaken for the third straight year with the percentage dropping from 7.5 per cent to 5 per cent.
“Ensuring economic growth and to improve that rank even further, the capital market can greatly contribute to develop and strengthen the economy in order to mobilize the investments within the capital market. Emerging economies like India has a very huge untapped market where near only 2.5 per cent of people are invested in the stock market compared to the US and China”, said Kaushlendra Singh Sengar (Founder & CEO), Invest19.com.
According to him, “An investment ecosystem within the capital markets creates sustainable, efficient mechanism for multiple investment products and services that in turn helps entry-level investors to benefit from simplified investment opportunities that encourage domestic savings & investments, and the businesses to raise long-term funds that can be used to purchase capital goods, thereby propelling increased in employment, business growth and fasten the pace of economic growth.”
He also added, “Channelization the savings of households into long-term investments will increase the mobilization of savings and therefore improves the overall efficiency and volume of investments, ultimately the economic growth.”
The country’s capital markets can help in creating greater financial involvement by introducing simplified new investment products which are tailored to suit the risk and return preferences of entry-level investors. Capital market is one of the key pillars of the Indian economy that can help in boosting the growth, development, and improving the rank.
The reports cite that the growth in the Indian economy is towards to economic liberalization that began in the early 1990s where industrial deregulation began alongside the reduction in control of foreign trade and investment. The privatization of the state-owned enterprises also aided in the economic drive.
India’s service sector is already one of the fastest-growing in the world and accounts for over 60 per cent of the economy and 28 per cent of employment. Agriculture and manufacturing are the other two significant sectors of the economy apart from service sector as per the reports.