Page 116 - Nuvama | IC Report 2023

• MANUFACTURING • NEW ENERGY • URBANISATION • CONSUMPTION PREMIUMISATION • EQUITY SAVINGS CULT

Equity savings cult: Taking off

It’d be wise to grasp that India’s endowments are likely to have a sweeping effect on consumption as
well as investment, perticularly in light of India’s demography dynamic fleshed out in this book. The
metamorphosis is in fact unlikely to be restricted to just these spheres. India’s savings rate as well as its
composition could see a sea change over the next decade—and some of it is underway. Deliberation
on its pragmatic sustenance and a pegging against global examples shall elucidate this further.
As argued in Demography, a young population with an improving income dynamic is what would truly
lift India’s savings rate over the next decade—as seen in China, Korea, etc. And among all channels, we
argue capital markets would likely play a vital role in intermediation of such savings.

Exhibit 1:
Savings rate 55 74
tends to be high if
population 72
is young 50
70
45
68
(% of GDP) 40 66 (% of total population)

64
35
62

30 60
1982 1995 2008 2021
China gross savings (% of GDP) China's working age population share (RHS)

41
76

37
72

(% of GDP) 33 68 (% of total population)

29 64

25 60
1976 1991 2006 2021
Korea gross savings (% of GDP) Korea's working age population share (RHS)
Source: World Bank, Nuvama Research

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