Is India the Bright Spot of the Future in the World Economy?

The year 2023 saw its share of successes with India entering the Elite Space Club with its successful mission to the moon and capturing the International spotlight by hosting the G20 summit. Even in the Cricket space, the Indian team left everyone stunned by their enthralling performance only to meet defeat at the World Cup finale'.

While in the employment space, layoffs that began in 2022 continued through 2023. According to Layoff.fyi, 2.61 lakh people lost their jobs in India in 2023, including 4,700 in the ed-tech sector, 2,765 in consumer foods, and 2,141 in the finance industry. Some stats are available here.

With other major events like

War in Gaza - Hamas launched attacks on Israelis on October 7th, 2023 killing 1,200 people and taking more than 200 hostages.

Odisha Train Collision Killed 296 on Jun 2nd, 2023

India becoming the world's most populous country, Manipur Violence etc. there were surely reasons for worry for all of us.

No, I'm not making any Karmic connections or reference to Kali Yuga, but if we think of it a lot, can be attributed to the misgovernance of our administrations and municipal authorities responsible for this chaos.

Fast forward to 2024, business isn't usual, with Gold prices skyrocketing and BSE indices touching new highs every day, there is a silver lining to the dark clouds.

The start of 2024 with the RBI pulling strings on Paytm after the Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action, the once bullish Fin-tech start-up that priced its IPO before listing at 2250/-per share is down to 413/- per share(as on 8th April 2024). They too laid off people due to the closure of business. A report is available on Paytm's story of Layoff 2024.

With the Technology industry already under strain...

Another unicorn start-up Byju's in the ed-tech space that was touching the skies from a whopping valuation of $22 billion to now at $1 billion is forced to lay off hundreds of people just on a call and email for reasons uncalled for.

It says it is suffering from a major funding crisis and a markdown in its valuation. This is in addition to 4500 employees being displaced in 2023.

#Reasons - A huge fallout on good corporate governance practices. Companies like Byjus were riding a winning horse till the funding environment signaled green in pre-pandemic times but soon after the COVID-19 crisis overshadowed many online ed-techs as offline classes and schools opened up.

In Feb 2022, after the Ukraine-Russian conflict in terms of open war was raging, the global markets started showing red signals towards funding and began questioning each strategic move made by Founders, their red flags came out in the light.

How the once Edtech superstar status like Rajnikanth fell to the pits can be related through this story of Byjus meteoric rise and shocking fall.

Despite the fallouts by Paytms and Byjus, the Indian startup economy is growing, maybe not at 200% growth but at least at 20-30%.

Heavyweight investors are now taking a back seat according to Investment bankers like Rainmaker Group but Indian public investors and family offices are prominent.

Some of the deals they have made in the Jan-Mar 2024 quarter.

The Indian Start-up Founders are now aware and consciously making slow and gradual moves towards growth not only for profits and revenue but for bringing efficiency in the unit economics of their company.

This ET report shows the update

The projections by reputed global agencies have shown positive outlook for the Indian economy -

Forbes Global has projected India to take on the third position just behind the USA and China leaving behind Germany and Japan by 2027.

Similarly, S&P Global indices are optimistic with numbers at 7.6 percent and 6.8 percent growth rates for 2024 and 2025 respectively.

In fact, a Singapore-based early-stage VC firm called Vertex Ventures SouthEast Asia has been closely observing and investing in Indian start-ups. Kanika Mayar, the partner is bullish on Indian startups for 2 major reasons:

1) High-Quality of Founders

2) Strong Economic indicators of India

Vertex Ventures focussed more on four sectors for investment viz - HealthTech, FinTech, SaaS, and Consumer-tech.

They are now diversifying to sectors like mobility, sustainability, and clean energy.

With plans to increase their start-up investments from an average 3-4 per annum to 6-7 annually.

In the past, they have made successful investments in FirstCry, Xpressbees and Licious with profitable exits. Several other startups in its portfolio were acquired, including Active.Ai by Gupshup, Cloudcherry by Cisco, Flutura by Accenture, Glowroad by Amazon, etc. One of its portfolio companies, Yatra, went public last year through a listing on Nasdaq.

Being bullish on the Indian economy she sees a promising future for the country.

Although the present scenario on funding is not on an upswing, due to diligence being exercised by VCs, she says the next 8-10 years would offer a huge rewarding success for the Indian start-up economy.

The bottom of the story is that the world is facing tough times and India is a silver lining among this. It's just about time we Indians have to show resilience, perseverance, and patience as good is in store for us. The glory that India had before through the tagline"Sone ki Chidiya" is not too far away!

On this optimistic note - leaving my readers with some ideas to ponder upon and share comments on what is your outlook on India for 2024-2025 and thereafter?