Technology and rising income levels will drive the next phase of India’s growth over the next 20 years, according to Macquarie, the Sydney-based global investment banking and financial services company. It released a report on its long-term expectations from India equities to mark 20 years of Macquarie opening its first office in Asia.
To its credit, India has macroeconomic and financial stability, a favourable demographic profile that supports high savings and investment and rising productivity, which promise a better 20 years. “India will add approximately 10 crore people to its working age population between now and 2025,” the report said.
Domestic savings“Domestic savings are a major driver of investment activity as it reflects a growing economy with rising incomes of households and private corporates and higher tax revenues to the government.” But this depends on key reforms taking place such as introduction of the GST, more infrastructure spending, more investment in developing human capital and improving the demand-supply mismatch. Barriers in the labour, land and capital markets should also be progressively dismantled.
Macquarie’s top stock recommendations for the next 20 years are: Apollo Hospitals, Axis Bank, Eicher Motors, HDFC Bank, Info Edge, L&T, Maruti Suzuki, Sun Pharma, TCS and Zee Entertainment.