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Business News/ Economy / How Indian stock market envision PM Modi's dream of 'Viksit Bharat' by 2047? Explained

How Indian stock market envision PM Modi's dream of 'Viksit Bharat' by 2047? Explained

Prime Minister Narendra Modi-led government launched a drive to gather youth ideas for 'Viksit Bharat'. BSE and NSE officials emphasize the market's role in India's development vision for 2047.

NSE and BSE officials emphasize market's contribution to 'Viksit Bharat'. Market cap growth to $4.5T in a decade puts India among global stock market leaders.Premium
NSE and BSE officials emphasize market's contribution to 'Viksit Bharat'. Market cap growth to $4.5T in a decade puts India among global stock market leaders.

Prime Minister Narendra Modi-led government recently launched a drive to source ideas from the youth for a blueprint to make India ‘Viksit Bharat’. He sees the Indian economy rising further in leaps and bounds by making the country a 'developed nation worth $30 trillion economy by 2047. The Indian equity market has been an instrumental part of the country's economic growth. Going ahead, the stock market is expected to support Indian businesses and jobs.

“NSE has provided numerous job opportunities. When it was set up in 1994, only 100s of trades used to take place every day. But today, we received 2,200 crore order messages in just 6 hours and 15 minutes. Of these, we process 22 crore trades each day. So imagine, how many people are involved in this ecosystem. This is one of the biggest contributions of equity markets," NSE Chief Business Development Officer Sriram Krishnan told LiveMint. 

He said, “Also, the equity market has become a very focal point in the overall transformation of the Indian economy. In the 1990s, we were more export-oriented. But today, we talk about the services economy which means financial services, another big contribution of equity markets. The third component is support to new businesses and investors. The number of IPOs that came in the last 15 months is mind-boggling. This kind of growth and confidence we have created."

More than 65 mainboard companies including Tata Technologies, Cyeint DLM, Signature Global (India), Nova AgriTech, Jana Small Finance Bank, and others have launched their IPOs in the past one and a half years.

BSE Chief Business Officer Sameer Patil also shared his insights on Indian equity markets' contribution to the Viksit Bharat@2047 mission and said that digitalization has helped the stock exchanges to grow and increase the participation of investors. 

“The stock markets look forward to the PM's vision of a developed nation by 2047, financial literacy, financial inclusion, the French revolution for the millennials, and Nari Shakti. Technology has played an important role in the market. During pre-Covid times, we had five crore investors. But now, we have 14 crore investors," the BSE official said. 

The NSE official further hailed PM Modi for setting a defined target to make India a developed nation in the coming years. "This is a new model of India. We were working without targets, but now the Prime Minister has stated aspirations. To achieve this, the equity market will work at the backend to break the larger vision into sub-targets."

Modi's regime so far has been marked by a major thrust on infrastructure projects, pro-business reforms, financial inclusion, and financial reforms. All this, along with political stability, has been positive for the market. Many top analysts had earlier highlighted that the Modi government has a strong influence on the stock market. 

In 2023, the Prime Minister urged investors to invest in Indian PSUs, saying 'Daav Laga Dijiye'. Since then, the stocks of 22 PSUs have turned out to be multi-baggers, resulting in a total market value increase of 66% to 59.5 lakh crore.

To become a developed country, India needs to work on building the commodities and deep debt markets, Krishnan said adding that the unicorns have a secret to produce invaluable companies in the future.

Speaking about extending working hours on the stock exchange, he recommended a small evening session between 6 pm to 9 pm to oversee how investors and the equity market will react, so that the trading hours can be stretched further and gradually leading to a 24-hour trading model which is being followed by many countries across the world.

"In the GIFT city, we are already working around 21 hours. We have the technology and can deliver this model. As we go towards the developed countries, this is necessary for India. We are also thinking about newer products like the ESG platform is going to happen in the next 10 years, carbon credits, etc. We also need to take out commodities and the debt market on a larger scale which needs massive investments," the NSE Chief Business Development officer told us.

The National Stock Exchange has also set up a separate platform for small and medium enterprises called NSE Emerge where more than 400 companies are listed and they have raised about 70,000 crores along with the market capitalization is more than 1 lakh crores.

"Small companies have seen decent growth in market cap. We have been facilitating more and more such SMEs to come onto the platform by educating them aggressively. This is an attempt from NSE with various state governments. We have signed 10-15 MoUs with many state governments to encourage small entrepreneurs," Krishnan said.

The National Stock Exchange and ANMI have recently collaborated with the Uttarakhand government to train graduates across the state to build careers in the financial services sector. A Memorandum of Understanding was signed in February 2024. The program, offering skill development and training tailored to financial services, is expected to benefit over 14,000 students in Uttarakhand. Similarly, NSE also inked a MoU with the West Bengal government in 2022 to facilitate fundraising for small and medium enterprises through the capital market.

More than 450 companies are registered with the BSE's SME segment whose market capitalization is about 1 lakh crore, said the BSE official, while emphasizing that India has over 6.5 crore small companies.

Patil said, "Our objective is not only to identify them but also to create a platform for them so that they can get themselves listed on the exchanges. The stock exchange platform not only enables them to think ahead but also to innovate and improve."

On stock market manipulations that took place in 2015, the NSE official said the equity market is investing in the latest technology like artificial intelligence, machine learning, and others to create a safe and transparent environment for investors.

"We have proper risk management in place and we always adhere to those," Patil said. 

SEBI had suspected tax evasion of at least 5,000-6,000 crore in 2015 and it clamped down on a large number of organized syndicates who had set up ‘shops’ to convert black money into legitimate-looking funds through the stock market platform. 

The Indian equity market size has witnessed phenomenal growth, that is, from $1.4 trillion to $ 4.5 trillion, in less than a decade, gaining its ground to lead the stock market superpowers across the globe. Currently, India's market capitalization (mcap) stands at $4.5 trillion, placing it in the fifth spot globally after the US, China, Japan, and Hong Kong. 

Market participants believe that India's journey has just taken off. Seconding the notion, global brokerage firm Jefferies in its recent note that the country's market capitalization will likely touch $10 trillion by 2030. Jefferies predicted that India's GDP is expected to touch $5 trillion making it the third-largest economy by 2027, surpassing Japan and Germany. Even the government has been focusing on it.

Over the last 10 years, India's GDP has grown by 7 percent CAGR in dollar terms to $3.6 trillion, becoming the fifth largest economy in the world, from being at the 8th spot, the Jeffries report said. The Indian equity markets have been able to generate consistent 10 percent annual returns in USD terms over the last 5, 10, 15, and 20-year periods.

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Published: 27 Feb 2024, 12:08 PM IST
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