THE NEW PRIORITY INVESTING IN THE STOCK MARKET

If we analyze the economic savings data of the Indian economy, we can conclude that the period between 2004 and 2010 was a prosperous era. This is evident from the consistent year-on-year increase in the percentage of economic savings and GDP during this time frame. Hence, it can be regarded as a golden time for the Indian economy.

In the year 2010, the economic savings was at 36.9 percent, which was the highest level till date, because during that time the growth rate of the Indian economy also increased rapidly every year. Since the year 2011, there has been a decrease in the figures of economic savings and the factors are the decrease in the rate of economic growth, rise in the inflation level and the feeling of disappointment with the political leadership in the first few years. Meanwhile, the COVID-19 pandemic emerged as a worldwide crisis, bringing with it unexpected physical and economic challenges for the entire society. During the year 2020-21, the starting year of Corona, the economic savings in the Indian economy was 28 percent of GDP because a large number of people lost their jobs during the lockdown, yet the positive trend is evident from the fact that the year 2021-22, Economic savings remained above 30 percent of GDP. That is, the behavior of financial savings is continuously intact among Indians.

It is worthwhile to mention here that over the past few years, the banking sector has lost its position as the primary point of focus. Instead, there has been a steady rise in the domestic savings of Indians, drawing attention away from the banking industry. Therefore, it is self-evident that many other sources of economic investment are becoming the priorities of the people. For example, the prevalence of insurance increased very rapidly during the Corona epidemic. It is also necessary to clarify here that life insurance in India has always been a main source of financial investment along with banks. Every Indian receives the treatment of financial investment in life insurance as a family approach. During the Corona epidemic, since physical crises were very sudden and uncertain, the practice of medical insurance suddenly increased rapidly in the society, but this practice could not take a permanent position as it saw a rapid decrease in the next financial year. This is a matter of great concern for the insurance business as to why insurance penetration is still very low in India today? During the year of Corona Pandemic, it suddenly increased from 3.8 percent to 4.2 percent. It should be known that the global average figure of insurance is 7 percent and in many developed countries including America, Britain etc. it is above 10 percent. Insurance companies must think in this regard whether the cost of premium in Indian society is high or not?

In recent times, there has been a noticeable surge in the flow of economic savings of Indians towards the Indian capital market. This trend has been receiving significant attention and recognition. According to statistics, in the year 2021-22, one million new investors were associated with the Indian capital market, who made financial investments through SIP (Systematic Investment Plan) in mutual funds. Out of this more than 4 percent of domestic savings has been seen towards the Indian capital market during one year itself. Both direct investment in equity and mutual funds have emerged as a major option. It would also be appropriate to mention here that in the last financial year, the option of investing in a large number of IPOs was also available for investment in the capital market, through which companies raised a large amount of capital from the Indian society. LIC’s IPO was the most talked about. Among new-age startups, the IPOs of Paytm and Zomato also created a lot of buzz. Perhaps this was the main reason that even when there was a period of economic recession during the Corona epidemic, the Indian capital market continued to grow because a large number of new investors joined the Indian capital market during that period. However, during that point of time the first priority of global investors was India rather than China. It has also been seen that the tendency of Indians to invest in pension and provident fund has also increased a lot. However, the withdrawal of the old pension scheme is a political issue, due to which there may be a change in the attitude of the investors under the new pension scheme in the upcoming time.

THE VIEWS EXPRESSED BY THE AUTHOR ARE PERSONAL

DR PS VOHRA The author is Writer, Columnist & Financial Expert