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India's per capita income is around $2200 (Rs. 1.76 LPA)
You could build a highly impactful startup if you could take a share of the income or if you could potentially raise their income.
Here are some themes for India in the coming decade ๐
This thread is a summary of the conversation between Ruchir and Pranoy Roi on NDTV on the eve of 75th Independence day.
Ruchir Sharma has some of the sharpest insights on the macroeconomy trends in emerging markets, especially India.
1. India's per capita income is the same as it was in the 1950s
India's per capita
1950โ $60
2020โ $2200.
Significant improvement in the poverty levels, but that change has happened globally.
India still ranks 150 out of the 205 countries in the bottom 25%.
- Until the 1990s China's per capita income was similar to that of India but skyrocketed post-1990s.
- China changed its orientation toward export and manufacturing
- Today China has Twice the number of cities with more than a million people as India has.
Migration in India is very low.
- Only 10% of the population in rural areas are from another district. Pretty much most of the people are native to the land.
- Without any drastic measures, it would take India 18 years to double its per capita income to $4400.
2. The working-age population is shrinking in 40 countries.
The population replacement rate (i.e.) the rate at which the newborns replace the older generation has become negative in many developed countries like Japan, China, and Italy.
- Even in India, the population growth is shrinking.
- By 2050 it is expected that India might go into negative population growth.
- This shrinking is due to an increase in life expectancy and women's decision to have fewer or no kids.
- Currently, India has the highest working-age population in the world.
- In the coming decades, I would bet that India might be exporting young labour migrants who would be required worldwide to take care of the elderly and in non-desk jobs.
3. We are entering an era of Deglobalisation.
In the last few decades, the world enjoyed the perils of globalisation. Countries outsourced jobs to other countries to optimise costs and stuck to what they were good at.
This led to a societal reaction worldwide where the citizens of the developing countries felt that their jobs were being taken away from them.
The West believes that globalisation benefits developing countries like India and China more.
These beliefs have led to populist regimes in the US and UK, which led to the victory of leaders like Trump and Borris Jhonson.
The fear of losing jobs to immigrants and exports has made countries like the US more protectionist. We see a similar trend in India too.
In his election speech, Trump made a statement, 'Our country is full,' to indicate that they would tighten the process to include more immigrants.
But data shows otherwise. Allowing more immigrants have always been beneficial to the economy.
Nearly 40% of America's scientists, one-third of the surgeons and doctors, half of silicon valley founders and more than two-thirds of tech employees are foreign-born. Mainly from China and India.
I predict that when the population replacement levels hit critical negative rates, countries might start opening up their borders to invite more immigrants, or the ones who take advantage of it would see faster growth.
4. Low women labour participation in India.
The female labour participation rate is around 21%. At the same time, it is about 45% in other countries with similar income levels.
Even Bangladesh has a higher female participation rate, around 38% (pre-pandemic).
Some believe that female labour participation is not captured appropriately in India.
For example, a woman working in farm fields or handling cattle for a rural family might not be considered labour as she does not earn a salary.
But what comes as a shocker is that the same data has shown a decline in the participation rate over a period of time.
Even considering this as a proxy for accurate data, the trend is worrisome.
Getting more women to participate in labour could be critical for India's faster growth.
It could help restore economic productivity in the case of a declining population growth rate.
These are some of the pointers that captured my attention. If you consider building a startup for India, addressing these themes with your product or service could see the immense potential on the higher side.
Let me know your thoughts on this
You can find the full post in my newsletter 'The India Notes' where I write about Indian consumer behaviour from the lens of design and tech :)
newsletter.theindianotes.com/