- Posted November 18, 2012 by
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India: Investor's Long Way
India is the seven largest country in the world and second most populated country in the world. With high rate of economic growth and 10th largest country with Nominal GDP India is a country with huge potential which is a part of G-20. Textile, Banking and Financial service, Mining, Retail, Agriculture, Energy and power and most developed roads is a main point for India. With 1 Billion and 210 Million population India is a main workforce place for companies to hire cheap working capital and it's a main reason why the most population of India lives in poverty. Beside that rate of growth in India is high, total living cost is same as it was in last 20 years. Big rate of corruption, lot of scammers in business is a main problem for Investor's to start and develop their business. Maybe working capital cost is low, but according the tax system in India it's hard to think about development when we want to pay all taxes, but if we will think avoid to pay taxes that's be enough for success in this place, but for future plan's it's a dengerous pont.
India is considered as one of the poorest and backward countries in the world. Only 52% of its population is literate. Its per capita income is about $350. Less than 50% of the houses have electricity, less than 23% of the houses have sanitation facilities. With these figures it might seem that India isn't a good market for business. But if these figures are broken up in different factors like Indian states or into numbers, one might find that India could be a good lucrative market for business.
The per capita income of India is low at $350. From this figure one can conclude that the salaries are low in India and therefore it is cheap to produce in India. But one might also conclude that India isn't a good market for marketing quality and costly products. But, even though the per capita income in India is low, India is a huge market, even for costly products. In general, India has a potential of almost a billion buyers. About 10% of Indian households have an income of just over $1400. Numerically that is about 100 million people, which is about the population of Germany. Less them 5% of Indian households have an income of over $30000, but numerically that is over 40 million people. Some estimated that by the year 2000, the number of Indian households to have this level of income would surpass that of USA. Beyond these figures, when the Indian income is measured by purchasing power parity - PPP - calculations, the Indian economy and income gives better figures. In this sense India is the fifth largest economy in the world.
The middle class of India is estimated at 180 million people. For these reasons, many international companies and names in different fields, from shoes to cars, have arrived in India and they manufacture and sell their goods in India. According from this all information for investor's who is trying to reach this market is more interested where to invest in this sphere? Accodring from my experience on consultancy i will present several sectors where to invest your free money or capital of your company and avoid all mistakes and faults in business, because it's top risk when reaching to market in the first time.
Below are Top 10 Investment Options in India which assure safe and satisfactory returns.
- Investments in Bank Fixed Deposits (FD)
Fixed Deposit or FD is accrues 9.25% of annual returns for non-senior citizen, depending on the bank's tenure and guidelines, which makes it's widely sought after and safe investment alternative. The minimum tenure of FD is 15 days and maximum tenure is 5 years and above. Senior citizens are entitled for exclusive rate of interest on Fixed Deposits, current rate of return is average 10% annual.
- Investments in Insurance policies
Insurance features among the best investment alternative as it offers services to indemnify your life, assets and money besides providing satisfactory and risk free profits. Indian Insurance Market offers various investment options with reasonably priced premium. Some of the popular Insurance policies in India are Home Insurance policies, Life Insurance policies, Health Insurance policies and Car Insurance policies.
Some top Insurance firm in India under whom you can buy insurance scheme are LIC, SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sunlife, HDFC Standard Life, Reliance Life, Max NewYork Life, Metlife, Tata AIG, Kotak Mahindra Life, ING Life Insurance, etc.
- Investments in National Saving Certificate (NSC)
National Saving Certificate (NSC) is subsidized and supported by government of India as is a secure investment technique with a lock in tenure of 6 years. There is no utmost limit in this investment option while the highest amount is estimated as ` 100. The investor is entitled for the calculated interest of 8% which is forfeited two times in a year. National Saving Certificate falls under Section 80C of IT Act and the profit accrued by the investor stands valid for tax deduction up to ` 1, 00,000.
-Investments in Public Provident Fund (PPF)
Like NSC, Public Provident Fund (PPF) is also supported by the Indian government. An investment of minimum ` 500 and maximum INR. 100,000 is required to be deposited in a fiscal year. The prospective investor can create it PPF account in a GPO or head post office or in any sub-divisions of the nationalized bank.
- Investments in Stock Market
Indian Stock market is very fluctuating. A smart portfolio positioned for long-term growth includes strong stocks from different industries. Before investing in stock market one should be prepared to assume risk equivalent to sum invested in the market. Investing in share market yields higher profits. Influenced by unanticipated turn of market events, stock market to some extent cannot be considered as the safest investment options. However, to accrue higher gains, an investor must update himself on the recent stock market news and events.
- Investments in Mutual Funds
Mutual Fund firms accumulate cash from willing investors and invest it in share market. Like stock market, mutual fund investment are also entitled for various market risks but with a fair share of profits. One should select mutual fund schemes based on all or some of the following criteria:
- Long term and Short Term Performance
Consistency in Returns
Performance during bullish and bearish phases
Fund Managers performance with the fund's operations
- Investments in Gold Deposit Scheme
Controlled by SBI, Gold Deposit Scheme was instigated in the year 1999. Investments in this scheme are open for trusts, firms and HUFs with no specific upper limit. The investor can deposit invest minimum of 200 gm in exchange for gold bonds holding a tariff free rate of interest of 3% - 4% on the basis of the period of the bond varying with a lock in period of 3 to 7 years.
- Investments in Real Estate
Indian real estate industry has huge prospects in sectors like commercial, housing, hospitality, retail, manufacturing, healthcare etc. Calculated realty demand for IT/ITES industry in 2010 is estimated at 150mn sq.ft. around the chief Indian cities.
- Investments in Equity
Maybe India is a poorest country but if we will analyse one mainc point that for business development it's important how many cunsomers you can find, India is a best and top place for this. Unlike of China, Indian economy is more liberal and free from governmental regulations.
Personal Financial and Investment Consultant
Global Partner of Bauhaus Capital Partners in Kuwait, Qatar, UAE, Turkey, Saudi Arabia.
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