India’s top 10 transformation moves in the last decade according to Morgan Stanley

Jun 1, 2023

By: Rounak Jain

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India shifts gears

India has been on the development road since the economy opened up in 1991. However, the last 10 years have seen a ‘run-rate acceleration’. A report by Morgan Stanley noted the journey. Read on for the top-10 highlights.

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India’s ‘401(K)’ moment

Indian investors are planning well for their retirement. Net assets under management have grown multifold to ₹41.62 lakh crore in April 2023 from ₹8.26 lakh crore in April 2013. Net domestic mutual fund flows rose to ₹1.21 lakh crore from ₹1.07 lakh crore in this period.

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FDI more than doubles

Foreign direct investment, a primary source of external capital, has risen substantially from $22 billion in 2013 to $46 billion in 2023, as per government data.

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Digital transactions: Up, up and away

Digital transactions as a percentage of GDP have skyrocketed from a meagre 4.4 percent in FY16 to 76.1 percent in FY23. This is even more impressive considered India’s nominal GDP stood at $2.29 trillion in FY16, while it is pegged at $3.2 trillion in FY23.

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RBI’s inflation fight

Tighter monetary policies have helped keep inflation in check. Consumer price index (CPI) inflation has fallen from 10 percent in 2013 to 4.7 percent in April 2023.

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Corporate tax rate rationalisation

Corporate tax rates have been rationalised, bringing them on par with peers. From an effective corporate tax rate of 33.99 percent in 2013, it is down to nearly 22 percent, according to a report by Bank of Baroda.

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Infrastructure push in the fast lane

Infrastructure buildup is now in the fast lane. Between FY15-23, 53,700 kilometres of national highways were constructed and 28,800 km of railway routes were electrified, as compared to 25,700 km of national highways and 4,100 km of railway routes between FY06-14.

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GST collections on a steady rise

Indirect tax reforms via GST have helped expand collections, from ₹7.19 lakh crore in FY18 to ₹18.1 lakh crore in FY23. For context, indirect tax collections in FY13 stood at ₹4.75 lakh crore.

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Direct transfer boost for social welfare schemes

Direct benefit transfer, thanks to the JAM trinity – Jan Dhan, Aadhaar, Mobile – has helped expand the ambit of social welfare schemes. Benefits via DBT increased from ₹7,368 crore in cash in FY13 to ₹2.63 lakh crore in cash and ₹4.14 lakh crore in kind in FY23, according to government data.

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Corporate debt under check

Corporate debt as a percentage of GDP has climbed down from 62 percent in FY15 to 50 percent in FY23 on an estimated basis. Impaired loan ratio has also fallen from over 11 percent in FY15 to nearly 6 percent in the first half of FY23.

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Real estate sector on road to recovery

The real estate sector, which is the second largest employment generator in India after agriculture, has seen a recovery. New launches of real estate projects have increased from 50,000 in FY15 to over 75,000 in the March 2023 quarter.

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