The global financial system is still in the throes of uncertainty, though most countries are now driving efforts towards fortifying their financial systems. India’s resilience has been admirable as it demonstrated that a domestic, consumption driven economy is more immune to the vagaries of global uncertainty. India has positioned itself to emerge stronger in the current milieu. For HDFC as well, the same holds true. The surge in individual home loans, particularly in the last quarter of the financial year under review is testimony of the renewed confidence of individuals. Armed with higher disposable incomes, the desire to own a home has intensified.
The aspirations of Indians will continue to rise. The projected growth opportunities in India are translating into mind-boggling numbers. India is expected to quadruple its GDP to US$ 4 trillion by 2025. From a shorter term perspective, India should be just two years away from reverting to its former GDP growth trajectory of over 9% per annum.
India will ride the wave of urban expansion. Currently, 28% of India’s population or 300 million people live in urban areas. It is estimated that by 2030, 40% of the population or approximately 600 million people will be living in India’s cities. A recent study by McKinsey Global Institute projects that by 2030, 70% of new jobs and 85% of India’s total tax revenue will emanate from cities. This unprecedented pace of urbanisation bodes well for our business as the projected rise in urban households will be a potential customer base for HDFC. The trend is already evident as younger people increasingly aspire to become homeowners. For an institution that has dedicated itself to providing housing finance for over three decades, there is nothing more gratifying than enabling more people to get on to the housing ladder.
Cities will be at the heart of all economic activity. The benefits of urbanisation are proven – increased productivity, commercialisation and sustainable growth. Cities are centres of innovation, ideas, knowledge and wealth creation. They also attract talent and provide life changing opportunities to people. Yet all cities in India are strained by lack of physical infrastructure.