The tabling of the latest Union budget means each of us gets to complain about whatever is most important to us. Earlier, people used to complain about onion prices; now they complain about long-term capital gains tax.
But how many people actually invest in the markets? The latest Economic Survey says there are 9.2 crore unique tax IDs registered in the NSE database. Just five years ago, there were only 2.7 crore such IDs — so it’s up 240% in five years. The government estimates that almost 20% of Indian households now invest in the market.
That’s not a majority, but it can hardly be dismissed as a privileged minority. A quiet revolution is sweeping the nation — in less than a generation, India has gone from being a nation of savers to a nation of investors. And the numbers keep galloping away.
One year ago, there were 11 crore demat accounts; now there are 15 crore. More and more, the young Indian is someone with a job in the formal sector and a systematic investment plan in a mutual fund. Last month, there were nearly 1 million new subscribers in the employees provident fund database, 58% of them between 18 and 25 years of age.
So where is young India investing its money? The country’s stock market capitalisation is now above $5 trillion, the fifth highest in the world. Recently, the IMF raised its forecast for India’s GDP growth for 2024-25 to 7 per cent.
It is worth remembering that in its final budget in 2014, the UPA government had set a target of 2043 for India to be the third largest economy. But India moved a lot faster after 2014. Next year, we will surpass Japan to become the fourth largest economy, and in 2026, the third largest.
What does it really mean for our people? It means that we have helped every segment of the population climb the next rung of the ladder to prosperity. For those at the bottom, it means basic amenities. From just 40% in 2014, the vast majority now has access to a toilet. Nearly 80% of rural homes have tap water, up from just 8% in 2014.
The scheme of “80 crore people on free rations” has been fiercely mocked. But it shows a stunning expansion of state capacity. The figure first appeared in Manmohan Singh’s final speech from the Red Fort on August 15, 2013. A food security programme was announced, but almost nothing could be done back then.
In 2010, the Supreme Court asked the government to distribute free foodgrains to the poor. The UPA government told the court that it could not be done. All that has changed now. With their most basic need taken care of, these 80 crore people are now free to spend their money on other things.
The same goes for digital infrastructure. Having bank accounts linked to Aadhaar means financial inclusion. The poorest have been able to bring their money into the system for the first time. The Centre and most state governments now use this digital expressway to send welfare benefits directly to the poor. This also means social empowerment, especially for women. They now have their own bank account, their own money and can make their own decisions.
For those willing to start a small business, there are MUDRA loans. The latest budget has doubled their limit to Rs 20 lakh. In the last 10 years, 44 crore MUDRA loans have been given. Under the PM SVANidhi scheme, even a street vendor can get a small loan of Rs 10,000-50,000; over 56 lakh street vendors have already used it.
On the other end of the business ladder, there are entrepreneurs raising startup capital from India and abroad. From 2012, they had to pay an ‘angel tax’ on the investor money. The tax rate could be as high as 30.9%. The year, the tax has been abolished.
Then there are those in the middle. Their standard deduction goes up from Rs 50,000 to Rs 75,000. Those who earn up to Rs 7.75 lakh will not need to pay income tax. Back in 2014, only those who earned less than Rs 2 lakh paid no tax.
A bold new India is emerging. But this India is also more outspoken and impatient. They will not hesitate to question their leaders when they see inefficiency or corruption. India is restless for greatness.
A quiet revolution that is sweeping the nation
How many people actually invest in the markets? The latest Economic Survey says there are 9.2 crore unique tax IDs registered in the NSE database. Just five years ago, there were only 2.7 crore such IDs — so it’s up 240% in five years. The government estimates that almost 20% of Indian households now invest in the market. That’s not a majority, but it can hardly be dismissed as a privileged minority.
Abhishek Banerjee, author and columnist
Karuna Gopal, President, Foundation for Futuristic Cities
(Views are personal)