Confederation of Indian Industry (CII) and PricewaterhouseCoopers (PwC) have collaborated to churn out a report titled - Towards 2015: “Sustaining inclusive growth - Evolving Business Models”. The report traces the high growth story of India, showcasing India as an attractive investment destination. India draws strength from its high rate of savings, investment and favorable demographic dividend, which have helped the Indian markets to weather the economic downturn. Assets under management having clocked a compounded growth rate of 28% over 2006-10, bear testimony to the resilience of the Indian economy. However, inspite of these growth statistics, which clearly show that mutual funds have gained popularity, India is burdened with stark penetration levels, lagging behind other global economies by a wide margin.
The report discusses the current status of the Indian mutual fund industry, with its high dependence on the corporate sector and low participation from the retail segment. It draws attention to inherent issues in the industry like penetration to smaller towns and cities and low levels of financial literacy. The report goes on to highlight the role played by distribution networks, and the need to focus on increasing the strength of these networks in order to attain higher penetration levels.
The Indian mutual fund industry is undergoing a transformation, witnessing a number of regulatory developments. Market participants are waiting to see how the industry adapts to these changes, while trying to maintain its pace of growth. The report has a section dedicated entirely to the evolving regulatory landscape in India, mapping it to business and regulatory developments taking place in other global economies like UK, US, China and Australia. The report also takes note of some of the regulatory changes that are likely to occur in the near-to-medium term, spelling out their impact. The report concludes by enumerating the various initiatives that the industry can take to transcend to the next growth level.
The report was released at the 6th Edition of the Mutual Fund Summit 2010 organised by CII on 23 June, 2010 in Mumbai.