Economic Survey 2025: Indian stock market among world’s best-performing; BSE m-cap to GDP ratio outpaces China, Brazil | Stock Market News
The Indian stock market has experienced heightened volatility since October 2024, driven by a mix of domestic and global factors. However, the Economic Survey 2025 highlights that, over the long term, the market has delivered remarkable growth and remains one of the world’s best-performing markets driven by strong profitability growth, rapid traction of digital financial infrastructure, expanding investor base and substantial reforms in products and processes.
The survey noted that India’s weight in the MSCI-EM index reached a new high of 20 per cent in July 2024 before settling down at 19.4 per cent at the end of December 2024. This is only the third highest after China and Taiwan.
“The compounded annualised returns of Nifty 50 for the past ten years (since March 2014) stand at 8.8 per cent (adjusted for USD), trailing below few indices, such as the US NASDAQ composite index (15.3 per cent) and US Dow Jones (9.2 per cent) among a select set of significant markets as of December 2024. The corresponding CAGR of China’s Shanghai Composite indices stands at 3.2 per cent,” the Economic Survey said.
The survey pointed out that the total market capitalisation (m-cap) of BSE-listed stocks closed above the $5 trillion milestone for the first time on 23 May 2024. At the end of December 2024, BSE’s market capitalisation increased by 14.2 per cent since March 2024 to reach ₹445.2 lakh crore.
The survey document highlighted that the BSE market capitalisation to GDP ratio stood at 136 per cent at the end of December 2024, rising significantly over the last 10 years. This is far higher than other emerging market economies like China (65 per cent) and Brazil (37 per cent).
The rise of retail investors
Indian capital market has witnessed a rapid growth in the number of retail investors in the post-pandemic world.
According to the survey, healthy corporate earnings, stable macro fundamentals, efficient and robust technology architecture facilitating efficient trading, clearing, and depository systems, and trust garnered by mutual fund ecosystem and online digital investment platforms have encouraged greater participation in capital markets.
The survey pointed out that the number of demat accounts has risen sharply by 33 per cent to 18.5 crore at the end of December 2024 on a year-on-year (YoY) basis.
According to the survey, individual investor share turnover was 35.6 per cent in the equity cash segment from April to December 2024. As of the end of December 2024, there were 11.5 crore unique investors with demat accounts and 5.6 crore unique investors in mutual funds.
“Higher investor participation has engendered a self-reinforcing cycle of strong market returns, bringing in even more investors. This, in turn, will eventually transform the securities market into a more diverse, inclusive, and robust platform for wealth creation,” said the Economic Survey.
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