India’s strong GDP growth rate and high rate of domestic consumption are contributing to bright prospects for consumer-oriented industries, according to Sujan Hajra, Chief Economist & Executive Director at Anand Rathi Shares and Stock Brokers. In an interview, Hajra states that India’s balanced mix of domestic consumption and savings has propelled it to become the world’s 7th largest consumer market. Despite short-term market volatility, Hajra identifies five key factors that support a positive outlook for the Indian equity market in the medium to long term. The only potential concern is the valuation of Indian equities. Hajra believes that the Reserve Bank of India (RBI) is likely to raise the policy rate if retail inflation remains high. He also highlights the growth potential of India’s experiments with digital payment systems using various technologies. In terms of investment advice, Hajra suggests that timing the market is difficult and advises investors to deploy their money in a staggered fashion rather than waiting for a market correction. He notes that corporates are investing significantly more in ETFs and index funds than retail investors due to the risk-return profile. Finally, Hajra emphasizes the importance of consumption as a driver of India’s GDP growth and suggests that it could lead to multibagger opportunities along with infrastructure development.
**Key Points:**
– India’s consumer-oriented industries have bright prospects due to strong GDP growth and high domestic consumption.
– The Indian equity market is expected to have a positive outlook in the medium to long term, supported by macro and corporate fundamentals, domestic and foreign money flow, and despite concerns about valuations.
– The RBI may raise the policy rate if retail inflation remains high.
– India’s experiments with digital payment systems using various technologies are viewed as a promising growth engine.
– Investors are advised to deploy their money in the market instead of waiting for a market correction.
– Corporates are investing more in ETFs and index funds, considering the risk-return profile.
– Consumption is expected to be a significant theme for India’s GDP growth, along with infrastructure development.
**Hot Take:**
India’s consumer-oriented industries, supported by strong GDP growth and high domestic consumption, are poised for success. The Indian equity market is expected to perform well in the medium to long term, with positive factors outweighing concerns about valuations. The RBI may raise the policy rate if inflation remains high, and India’s experiments with digital payment systems have significant growth potential. Investors should consider deploying their money in the market rather than waiting for a correction. Corporates are showing increased interest in ETFs and index funds, and consumption will likely be a key driver of India’s future GDP growth.
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