Prime Minister Narendra Modi has completed 11 years in office and Indian capital markets during this time has seen a phenomenal rally. The bluechip Nifty index, has seen an unprecedented leap gaining a mind-boggling 241 per cent return, in just over a decade. Likewise, on the remarkable gains, the overall market capitalisation has zoomed by 442 per cent. G. Chokkalingam, Founder- Equninomics pointed out that in compounding terms, this is higher than the historical averages.
Triggers responsible for 241% gains on Nifty in 11 years
Further he attributed such robust gains primarily to two factors
- Political stability: The analysts went on to say that before 2014 there was a lot of political instability at the Union Government or central government level.
- Improving macros: At the macro-economic level, India is moving ahead at a rapid pace with gross domestic product (GDP) growth at anyway between 6-7 per cent i.e. the fastest growth in comparison to other major economies globally.
The centre has been focusing on fiscal prudence – as a result of fiscal deficit has been consistently improving, better and consistenly improving GST collection and forex reserves scaling fresh highs are some of the key indicators of India’s strong macros.
Agriculture and Banking – 2 major pillars of Indian economy grew unprecedentedly
In addition, the country’s core agricultural sector has been doing extremely well -with record food grain production – for 2-3 years in a row.
Besides, banking sector – which is another integral pillar of the country’s economy grew and advanced substantially- logging good and record improvement on the asset quality front especially in the case of public sector banks.
Chokkalingam noted that in PSU Banks, the gross non-performing assets (GNPA) used to be 15-16 per cent of the total advances and now it has come down to 3 per cent for most banks.
Similarly net NPA which used to be 7-8 per cent has on an average come down to 0.5-0.6 per cent for public sector banks or PSBs.
Alongside, credit growth has been robust in double-digits.
(More to come)
