The Union Asset Management Company said the Indian economy is not only getting larger but is also projected to grow at a much faster rate compared to other sizeable economies and investors should stay invested in equity market to tap the benefits despite all short term turbulence.

Sanjay Bembalkar, Chief Investment Officer (Equities), Union AMC, said as per the International Monetary Fund data, India is expected to be the ninth fastest growing nation in the next five years. However, what gets hidden in these ranks is the fact that the eight other fastest countries ahead have a GDP of less than $919 billion against $3.17 trillion of India, he said releasing the report on markets and India’s Decade of Fastest Growing Economy titled “The Elephant Dances On”.

The report emphasis that though India’s GDP per capita has grown three times from $814 in 2006 to $2,280 in 2021, it is far behind the average GDP per capita of the top 10 largest nations in the world at $43,037.

Globally, every country seems to be seriously affected by the ongoing Russia-Ukraine war, concomitant geopolitical turmoil and the fight against inflation. However, the Indian economy is largely driven by sharp growth in private consumption.

“A significant 55 per cent of our GDP comes from private consumption. So, when we own more cars, consume more electricity, use more internet and travel more, it will drive private consumption and government capex to facilitate the same,“ said Bembalkar.

“The gap between India and the rest is bridging very fast and is driving growth for the country. And that is why, we are not perturbed by short-term volatility in the markets and are bullish on the long-term prospects of India,” he said.

The rising interest rate amid high inflation and stressed balance sheet of governments are among the major risks that can delay the growth by few years. However, India Inc financials have improved and are more cost efficient than before, said Bembalkar.

The geopolitical issues and escalation of the ongoing Russia-Ukraine war could unsettle the supply chain. This could have an impact on raw material supply for mobile components and inputs for electric vehicle manufacturing, he said.