Ideas of India Sajith Pai Unpacks the 2024 Indus Valley Annual Report and the Changing Indian Consumer
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Jul 4, 2024 Sajith Pai, partner at Blume Ventures, discusses the 2024 Indus Valley Annual Report, India's consumer dynamics, fixed capital formation, fintech industry, space tech, and more. Topics include growth of India 2, challenges in the economy, female migration trends, rise of space technology, and book recommendations.
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India2's Rapid Consumer Expansion
- India2's consumer base expanded rapidly from 100 to 300 million, driven by changing consumption patterns, not income growth.
- Startups adapt to India2's micro-payment habits enabled by UPI, unlocking new digital spending behaviors.
Private Consumption Powers India
- India's economy is highly dependent on private consumption due to weak gross fixed capital formation.
- The regressive tax structure relies heavily on consumption taxes, keeping direct taxes low.
Capital Formation Challenges
- Declining gross fixed capital formation since 2011 limits India's private investment.
- Recent VC interest in manufacturing and deep tech is emerging but still nascent, signaling potential future growth.