EQ Saturday Sapience #32

Equity Intelligence 16th September 2023

Some studies foresee India’s per capita GDP growth to continue to pace faster than China for a very long time and converge around 2044. If this does happen it has staggering implications for India. Globally, business history shows joint efforts by government and industry to fund blue sky research have yielded breakout results. India should encourage science, innovation and research at scale along with Make in India. Considering that formal lending activity is still a low percentage in India, credit on UPI is about putting a structured lending product on a structured network issued by a regulated entity and could be a great moment in democratising credit in India.


The long history of convergence favors India. For approximately 480 years (between 1500 and 1980) China and India had the same per capita income (constant PPP$). Then came the big divergence for 44 years; at its peak, in 2014, China’s per capita income was 2.34 times that of India. History does repeat itself, sometimes in a V-shaped pattern. The path to re-convergence is likely to take less than 30 years.

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For Make in India, Invent in India. The institutions that mediate the flow of capital and resources to convert scientific knowledge into technology-based wealth will require drastic changes to become effective and efficient so that these institutions power India’s economic output.

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Credit on UPI kicks off in a move to further democratise funding. HDFC Bank and ICICI Bank are in rollout mode, as other banks work on similar products. Existing BNPL fintechs will need to further rethink their business models, say experts.

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Quote of the Week

“There will be bear markets about twice every 10 years and recessions about twice every 10 or 12 years but nobody has been able to predict them reliably. So the best thing to do is to buy when shares are thoroughly depressed and that means when other people are selling.” – John Templeton