Great articles to read on the web

Below is my takeaway from MS article. Not sharing PDF due to copyright issue. It’s 127 page report – fasinating to read it.

Why this is India’s Decade
Blue paper by Morgan Stanley – 31st October 2022

				Current 	        Estimated (Decade)         X

GDP Per Capita (US$): 2278 5242 2.30
Export share %(Global): 2.2 4.5 2.05
Household income (above $ 35k): 5.6 to 25.2 4.50
It services ($ bn) 178 527 2.96
Stock Market ($ bn) 3500 10000 2.86
This is base case (between bull and bear)

Growth led by:

1. Off shoring: Work from India. Will be factory of world as well (Along with back office of world). Manufacturing share to GDP will be 21% from 15.6%. It will be $1.49trn from $447bn.

2. Digital Differentiation: Already changed the way India handles documents, invests and make payments, it set to alter lending, spending and insurance.
   World has seen US model (Free market) & advertising revenue.
   China Model: Behind firewall, created Alibaba & Tencent
   Europe: More regulated
   Indiastack: Inclusive, transaction led web3 model. Provides interoperability, democratizes data and decentralized. Like UPI, eKYC, Aadhar, GST, Fasttag, ONDC etc.

3. Energy Transition: This is global transitions. Renewable sources will impact positively to India.
   Consumption: With rising GDP and income discretionary consumption boom

Risks: Prolonged global recession, sluggish growth, geopolitical, domestic politics and policy errors, shortage of skilled labor and steep rising in energy and commodity prices.

Other imp points:

1. Government policy shift:
   Rural Employment Guarantee Act – MANREGA implemented in 2006 failed. It basically transfer of profits to wages. The idea was higher wages should result in higher demand and will increase profit. This failed as India’s surplus labor led to inflation rather rise in real growth. This is reversed by cutting corporate tax from 34.9 to 25.2, this gives more profit in hand of companies for expansion. Govt also done calibrated sector specific steps like PLI scheme, RERA, Bankruptcy code, Inflation framework etc.

2. Multipolar world: USA and china will compete directly. While Europe, Japan and row will attempt balancing act and find economic opportunity.

3. Paris accord will help cut fossile fuel and increase share of renewable energy.

4. 25% of incremental global car sales will be from India. Out of it 30% will be EVs.

5. In 2030 India will hit major inflection point via high per cap income, 30 median age and higher urbanization which will lead residential property boom.

6. It infrastructure spens as % of capex is around 30% ehich is above average since 2019.

7. Retail/MSME loan growth to accelerate to a 19% CAGR over the next decade.