"Why Indians Don't Invest in the Stock Market: Exploring the Barriers to Participation in India's Economy"

The Indian economy is one of the top 5 economies in the world in terms of real GDP, with more than $3.5 trillion. However, only 3% of Indians invest their savings in the stock market or equity, as shown in the graph. However, developed nations like the United States and the United Kingdom are at 55% and 33%, respectively. Our government has a bold plan to increase the GDP by 10 times to $30 trillion.

But why does it seem so challenging to create a developed economy without stock market participation? I truly believe that a country's wealth is determined by the number of successful businesses that operate within it. The stock market is a good source of funding for businesses, and it also helps to increase market liquidity. Why the stock market is important for a country is a topic for another discussion.

WHY DO WE NOT INVEST IN THE MARKET?

We are not Crazy

Sadly, a few of them even committed suicide since they had lost all of their money when the stock crashed because of fraud or market downturns. They had witnessed many people burn their fingers in this game, so their suffering was deeply engraved in their memories. Because of this, many who have experienced all of these things are afraid to invest in the market and do not want their children to stay in the stock market. Thus, "Abba Nhi Manenge" is a typical expression among youths.

No one is crazy because, as Morgan Housel brings out in his brilliant book, "we all make decisions based on our own unique experiences that seem to make sense to us in a given moment." Probably, if you were in their shoes, you would act the same way.

Stop blaming your parents for selling a piece of land that was once worth thousands of rupees but today is worth crores.

I need Money

The most important element of investing is money; without it, you cannot buy stock, gold, real estate, or so-called cryptocurrency. Our country's per capita income, which is only around $2000, is extremely low; China's is more than six times higher than India's. Bangladesh even maintains a higher per capita income than our country does.

Wish I had a good Education

Only 18% of people in India could read and write in 1947, the year the country gained freedom. That would be like running a marathon on one leg alone! But thanks to government efforts and a lot of hard work, India's literacy rate has risen to 77.70%. But still only 27% of students register for higher education at this time. Additionally, the condition of schools is the least fortunate in the villages where a large number of students live; even a student in the 12th grade struggles to read and write properly.

I want Stability

Unfortunately, a substantial amount of the population chooses to run for government jobs or seeks extraordinary stability in their lives. They don't want to live in an environment of risk or uncertainty. We only make investments in assets with very little fluctuation in price, like fixed deposits, real estate, and gold. According to the RBI's research, "The Indian Household Finance Landscape," a whopping 76.9% of household wealth in India is held in real estate. According to the survey, even the poorest groups of people choose to invest their money in gold or real estate. This shows the significance that real estate plays in the Indian investing atmosphere to give them a stability, making it an important industry to take into consideration. Source