Social capital is the key.

There is a stark contrast in the growth stories of India and China. Mint. "For India, consumption - essentially, spending by households - has been the economic driver." Household consumption accounts for 60% of GDP. "By comparison, consumption accounts for 39% of China's GDP." "China's great strength, and India's weakness over the past 15 years or so, has been investment, or the net addition to capital goods like machinery and equipment." "One thing that enabled China to grow this fast, and for this long, was the social capital it had in place in 1980," which was that "Although it was a developing nation then, China had in place building blocks in education and healthcare, helping it to harness the demographic dividend provided by a large young population." In 75 years since independence, India's GDP has grown from Rs 2.7 trillion to Rs 135.13 trillion and is now the sixth largest economy. NDTV. The problem is that India has suffered premature deindustrialization, the share of manufacturing and agriculture in our GDP has shrunk, "The services sector is one of India's largest and most important sectors, from a growth perspective," and "For a long time now, India's net importer position has widened its trade deficit vis-a-vis other countries," wrote Prof Deepanshu Mohan et al. "India will need to increase manufacturing to become a viable alternative to China, as the world is looking to move their production from the factory floor," but "Recent data shows that while India's gross domestic product (GDP) grew at 6.3%, a sharp fall in the manufacturing sector has raised alarm bells." ET. In the developing world, we can think of four-wheeler ownership as a proxy for upper middle class status and two-wheeler ownership as a proxy for lower middle class status," wrote Pramit Bhattacharya. The share of households owning a two-wheeler was 50% in 2020 in India, 54% in 2017-18 in Pakistan and 79% in 2017 in Indonesia. "The penetration of two-wheelers and four-wheelers in India today is roughly at the level where Indonesia was in 2007." "Never bet against Indian (stock) markets," exulted Somnath Mukherjee. "Over the last 30 years, through global and local ebbs and flows, the zeitgeist of globalization and now the unraveling of the same, through conflict and wars, Indian stocks have been massive outliers to all its emerging market (EM) peers." But, "RBI data for commercial banks shows consumer loans in four categories - advances against fixed deposits, advances against shares or bonds, loans against gold jewelry and other personal loans - grew by almost 71% between April 2020 and November 2022. It is quite likely that a large proportion of these loans found their way into stock markets," wrote Rajrishi Singhal. Stock markets on steroids. For how long?