July 1991 to July 2016: The Megatrend Is Far from Over - Views on News from Equitymaster

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The Equitymaster Research Digest

July 1991 to July 2016: The Megatrend Is Far from Over
Jul 7, 2016

  • Revisiting the Megatrend
  • Crony socialism
  • Why is Richa's team travelling so much?

The month of July 1991 holds immense importance in India's economic history. That was when Finance Minister Manmohan Singh read out a path-breaking budget that unleashed critical reforms and gave the Indian economy the tailwinds of a Megatrend.

We call it a Megatrend because it had multiple, far-reaching, long-term impacts on the Indian people and Indian corporations. The BSE Sensex's move from 1,600 in July 1991 to 27,000 now is just one indication of this Megatrend.

If you look at the table below, the last 25 years offered just about every kind of company in manufacturing, exports, and services tailwinds to grow multifold.

What Changed in 25 Years?
  Jul-91 Jul-16
GDP growth (%) 1.4 7.6
Agri as share of GDP (%) 28.5 15.4
Forex Reserves (US$ bn) 9.2 355.5
Number of taxpayers (m) 4.0 50.0
Literacy rate (%) 52.2 74.4
Registered vehicles (m nos) 21.4 159.5
Bank accounts (m) 355.0 1,227.0
Telephone connectivity (mobile / 1000) 2.3 80.0
FII investment (Rs bn) - 160.2
Market cap to GDP 15.8 72.8
Sensex 1,600.0 27,000.0
Source: Mint,RBI,BusinessStandard
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