Recently, in the month of May 2019, India has been in the news for conducting the largest democratic election in the world in which more than 600 million votes were cast. The Indian people reposed faith in the leadership of outgoing prime minister, Mr. Narendra Modi, giving him an even bigger mandate than what he got in 2014.
However, two other achievements of India in the month of May 2019 have gone unreported.
Firstly, at the end of May 2019, the proportion of extreme poor in India has most likely fallen below 3%. Extreme poverty (2012 $1.90 PPP Income per day) was 25% in rural India in 2012. This has now fallen below 3% in last few days. The 3% of population is a level which expert take as level for eradication of extreme poverty.
Secondly. At the start of May 2019, India’s total fertility rate fell below 2.05% per annum, a level considered by experts as replacement rate.
So, in the month of May 2019, India’s demographics achieved two major milestones. In fact, India might be the only country in the world where TFR voluntarily fell below replacement rate before escaping extreme poverty.
These demographic developments, even more than the headline grabbing political developments, have major implications for asset allocations across the globe, as India accounts for one-sixth of global population and maybe one-third of global increase in GDP in next one or two decades.