By KS Nayar
India’s economic acceleration is on track. It is racing to notch up an 8 per cent growth during the current financial year. It means the market will expand and consumption will see explosive growth. That is good news for the industry – from automobiles to smartphones.
The growth drivers will be India’s 440 million millennials. Egging them into the market will be the 390 million Gen Z, those who are born after 2000. This amply reflects India’s demographic dividend. This is exciting to marketers and investors.
This youthful population is the best-educated generation since Independence in 1947. These young men and women will be on top of the huge middle class segment driving the country’s prosperity. Over the next two decades, they will form 40 per cent of the population creating the world’s fifth largest consumer market.
India is reckoned as the fastest growing economy in the world. Modi told a conference of US investors during his Washington visit in June this year that this is an opportune time not only for Indians, but also for the global business as the country offers multiple benefits.
What is more important is that this new growth engine is driven by democracy. The benefits of it include dealing with a “reliable partner” whose ecosystem is attractive to business. It is boosting consumption demand, which in turn facilitates entrepreneurship and technological advancement.
India’s central bank says that the macro data indicates a steady GDP growth of 7.6 per cent in financial year 2016. When this momentum is kept, thanks to expected favourable monsoons, o there will be a clutch of factors that will continue to push the growth to even 8.5 per cent next year.
However, what is disconcerting is the laggardness in job creation. This will be government’s top priority. More resources are being poured into rural areas to boost income and therefore consumption. As the children of economic liberalisation, which started in 1991, most young adults are ambitious to earn for a better life. They are unlike their parents born under socialist dispensation that stifled creativity and business initiative.