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Retail & Consumer Industry - page 17 / 88





17 / 88

Source: IMAGES F&R Research

India’s retail sector is supported by strong economic fundamentals

India’s robust macro- and microeconomic fundamentals will further accelerate the growth of retail –

  • Robust GDP growth— India, with its aggressive growth policy, witnessed an average growth rate of 9 percent per annum from 2005 to 2008 and an impressive growth rate of 6.7 percent in 2008-09 , despite the pervasive effects of the global financial crisis.

  • Favorable demographics— India is one of the youngest and largest consumer markets in the world with a median age of approximately 25.1 years , the lowest compared to other developed countries. Young Indians are earning higher salaries than their parents did at their age. They are adding further lift and buoyancy to the economy through the purchase of several categories of products that include mobile phones, two-wheelers, branded apparel, jewellery, etc.

  • Government policies—The Indian Government’s efforts to encourage inclusive growth are expected to help drive total consumption levels. In the Interim Budget for 2009-10 (16 February 2009), Finance Minister Pranab Mukherjee stated that the government will ensure that its policies encourage further inclusive growth by creating 12 million new opportunities for work per year and reduce the number of people living below the poverty line to less than half by 2014. The government is also investing in improving education, infrastructure and agricultural growth; these investments will further boost consumption in the country.

  • Growth potential in rural India—72.2 percent of India’s population resides in rural areas, making rural India an incredibly attractive market. Rural India is experiencing an increase in liquidity levels, growth in demand and a rise in consumerism due to rising incomes as a result of healthy agricultural growth rates of over four percent from 2003-04 to 2008-09 . The Government of India is also undertaking various initiatives focused on accelerating rural development, such as extending the loan waiver scheme and expanding rural development programmes

    • (e.

      g., The National Rural Employment Guarantee Act).



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