A mega financialization theme is currently underway in India. If we look at the size of economy, we are already 5^th largest and within 2 years we will be 3^rd largest economy in the world. But the beauty of the mega themes is that they continue for decades so now let’s consider the size of the Indian Capital Market as somewhere close to $5 Trillion as measured by the market capitalization. Several financial institutions both Indian and International as well as government and private have made their prediction about the size of the economy (GDP) by the year 2047 and based on various sources and our calculations we believe the market capitalization to be in the range of $50 Trillion to $60 Trillion by 2047. This clearly is going to be the largest wealth creation in the history of our country. The question therefore is how can the people benefit from this and thrive.

1. Financial Inclusion & Literacy: The size and nature of this huge opportunity needs to be communicated to everyone in every possible language. We have to increase the level of financial literacy and communicate the opportunity offered by the India’s capital markets. Few years back only about 5% people invested in the capital markets directly or indirectly but this has increase to 10% at the start of 2025. This is likely to go up to 50% in next 25 years. That is when we can truly say that we have come a long way from “Nation of Savers to Nation of Investors”
2. Financial Products/ Assets: Lots of small, medium and large enterprise can and will tap capital markets for their capital needs. This will be possible once we develop a clear understanding that capital market opportunity is large and provides an alternative to bank savings and fixed deposit to deploy available capital. Clearly Indian household have 50% to 60% of their wealth as cash, savings bank or fixed deposits. In developed markets this is less than 20% which creates large capital formation opportunity via migration from household to capital markets. This will also require investor education about all kinds of debt, equity related products, all kinds of mutual funds, PMS, AIF, Exchange Traded Funds (ETFs).
3. Framework that builds Trust: There has been lot of effort in the regulatory governance framework in past few years. Government policies need to be stable. Technology & digitalization will play very critical role when we operate at scale. This needs to be stepped up continuously and upgraded/modernised to ensure there is harmony, transparency & trust.

Thriving capital markets is possible if we build the right capabilities, investor awareness and great governance framework. And what a way, it will be, to celebrate 100 years of independence!  We believe Indian capital market will become one of the largest in the world by year 2047. Do you also believe so?

Rajesh Jaswal

CEO, Rising Tide Wealth