Nikhil Kamath, Zerodha's co-founder, on Tuesday, said that India's domestic consumption sector has the possibilities for growth and a positive trajectory.
Kamath took to Twitter and said, "Lower corporate debt and a household savings rate which is trending down could mean domestic consumption is the sector to be in the coming decade."
He added, "It's strange that so few domestic consumption stories have scaled to 1000cr plus sales hitherto."
Accompanying the tweet, Kamath shared an image to demonstrate the changes in the debt rate in India through various charts representing debt as the percentage of Gross Domestic Product (GDP).
The chart shows a decrease in 'Household' debt from 42 per cent in 2008 to 35.5 per cent in 2022. Current debt is slightly more than the 32.7 per cent reported in 2017, but overall the debt rate seems to be going down for Indian households.
Corporates follow a similar pattern as households with 107.3 per cent in 2008 to 87.7 per cent in 2022. There was an increase from 2017, when corporates reportedly held 89.7 per cent of debt.
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The Government on the other hand, according to Kamath's chart, has increased from 71.6 per cent in 2008 to 82.1 per cent in 2022. Following the same patterns as 'Households' and 'Corporate' the fall in debt percentage was at 69.5 in 2017.
India ranks third in emerging markets in terms of total debt of $4.65 trillion. Indian households account for $1.01 trillion, non-financial corporate (NFC) debt makes up $1.54 trillion and the private sector debt covers the remaining $2.55 trillion.
Although Kamath did not add any sources for the figures shared in his tweets, the general outlook is in line with the Economic Survey 2023-34 that noted India's economic resilience was due to the maturity of domestic consumption which had rebounded far better as compared to other nations.
