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On the occasion of Youth Day – 2020, we have a contribution from Amit Shah. He is a personal finance trainer who has been spreading awareness about investing through over 285 seminars and workshops, so far, in which 40,000+ investors and over 1,000 advisors participated. Amit has a post-graduate diploma in business management.

India’s Youthquake – Where is the disruption heading?

“Youthquake” was Oxford Dictionary’s word of the year in 2017; it also chose ‘Aadhaar’ as the Hindi word of 2017. The impact of both these have been game-changers for India.

The dictionary describes ‘Youthquake’ as a significant cultural, political or social change arising from the actions or influence of young people.

With 80 crore young people (average age of 29 years) India has the largest young population and the youngest population in the world.

Let’s look at how this youthquake has altered the financial landscape in India.

Although the volume of debit card payments is still way ahead of credit card payments in terms of volumes, the CAGR in credit card payments has been 104% over the past decade (2010-2019) while that of debit card payments has been 86% during the same period.

Sector	FY 2010 Amount in Rs. Cr.	FY 2019 Amount in Rs. Cr.	Change in Decade (in times)
Credit Card Payments	97,873	6,07,94,600	621.15
Debit Card Payments	14,52,204	39,04,26,400	268.66

Source: RBI, Mint Research.

Some interesting trends have emerged on the investment front too. Although the youth has adopted the spending habits of the West, their investment patterns remain conservative.

Sector	2010	2019	Change in Decade (in times)
NPS asset under Management*	29,852	3,92,467	13.14
MF Investments^	7,87,496	26,94,385	3.42
Life Insurance premium#	2,65,447	5,08,132	1.91

Source and timelines: *FY 20 till Nov 2019 – NPS Trust; ^March 2010 to Nov 2019 – AMFI; #Total premium underwritten – IRDAI annual report, 2010 & 2019.

The disturbing fact has been that overall, as a country, our savings have been declining steadily over the decade. India’s Gross Savings Rate, which was measured at 36.9% in Mar 2011, fell to 30.5% by March-end 2018.

What’s worse is that India’s happiness ranking has dropped to 140 in 2019 from 117 in 2015 and is now way behind Pakistan, China and even Bangladesh.

India’s Happiness Ranking over the years

Year	Ranking
2015	117
2016	118
2017	122
2018	133
2019	140

It appears that the traditional Indian philosophy of delayed gratification in spending and investing is giving way to a more western trend of instant gratification. Unfortunately, studies show that this mindset leaves individuals dissatisfied with their purchases/acquisitions and they are likely to tend to seek their next quick fix of gratification relatively sooner. Is this the economic and social landscape transformation that India’s youthquake foretells?

Bonus read:
Seeking answers to Amit Shah’s questions, Ventura conducted a quick poll on Youth Day – 2020, across social media platforms. Over 300 youth (ages 20-30 years) responded to our four questions:

• Do you prefer to spend using your Debit Card or Credit Card?
• What percent of your income do you save?
• In what types of products do you tend to invest?
• Are you happy with the way you spend and save your money?

We are happy to note that while the results broadly conform to Amit Shah’s observations, there is scope for a turnaround towards healthy financial habits in India’s youth.
Our findings…You May Also Like to Read – Ventura: Partners in Financial Inclusion