Client Associates Projects India's Economy To $10 Tn

Client Associates has projected India's march to a USD 10 trillion economy at India@2030 - investment horizons conference, which aims to dissect the budget's implications on various financial sectors, particularly emphasising its impact on HNIs and UHNIs, startup investments, alternate investments, mutual funds and the broader market.

Nilesh Shah, Managing Director and Group President of Kotak Mahindra AMC, highlighted the government's fiscal strategy. He remarked, “One of the standout aspects of this budget was the government’s commitment towards fiscal consolidation, aiming to bring the primary deficit down to 0.5-0 per cent by 2027-28. This approach is expected to significantly reduce the cost of capital in India, which will support sustainable equity valuations and provide ample capital for private entrepreneurs to invest and grow their businesses.”

Shah also said that India's inclusion in the Global MSCI index reflects the rising interest of foreign investors, a positive sign for future investments.

Himanshu Kohli, Co-founder of Client Associates, expressed optimism about India's financial trajectory. “Recent developments suggest promising improvements for India's financial landscape. As we aim for a USD 10 trillion mark and anticipate significant returns—the potential for market doubling within eight years highlights our growth trajectory. Enhanced credit ratings will facilitate better borrowing conditions and attract more investors, boosting overall market efficiency and portfolio profitability,” Kohli stated.

Kohli also pointed out the stark disparity between India's tax-filing population and global norms, noting that only about 2 per cent of Indians currently file tax returns. The government is addressing this issue by simplifying tax laws and expanding the tax base, with a target of including 15-20 per cent of the population, which is crucial for sustainable economic growth.

Amarjeet Makhija, Partner at PwC, noted the government's efforts to promote long-term investments. “In the changing landscape of taxation, the latest tweaks to capital gains tax rates show a big move to push long-term investing. By widening the gap between short-term and long-term tax rates, the government wants to create a more stable environment for investments and boost savings,” Makhija said.