India’s rich are fuelling a market-investing boom

New Delhi: India's future economic growth is projected to be propelled by robust domestic consumption, ongoing government infrastructure spending, and a resurgence in private investment, as outlined in a report by Crisil. The International Monetary Fund (IMF) anticipates India's per-capita GDP to increase by over 9% between 2027 and 2030, fueled by higher incomes and productivity gains.

As per-capita income ascends, households are anticipated to direct a larger portion of their funds towards savings, thereby boosting their engagement in market-linked investments. This, in turn, is expected to bolster investment and financial market development, thereby sustaining India's economic momentum by 2030.

The report also emphasizes a structural transition in the manner Indian households utilize their savings, with an increasing share of the country's substantial household savings pool channeling into market-linked instruments. This shift has bolstered the robust growth of the mutual fund sector. The share of mutual funds in the annual household savings flow rose from 3% in 2020 to 13% in 2025, underscoring a structural shift in how savings are managed.

Notably, this expansion has been particularly pronounced in recent years, with mutual fund assets under management (AUM) more than doubling from Rs 31.43 lakh crore in March 2021 to Rs 73.73 lakh crore in March 2026, marking an 18.60% compound annual growth rate (CAGR).

This growth has outpaced bank deposits, which increased by 11.2% during the same period. In February 2026, the mutual fund industry's AUM reached a record Rs 82.03 lakh crore. Crisil attributes this surge to rapid digitalization, heightened financial literacy, a growing inclination towards systematic investment plans (SIPs), and overall, this transformation signals the rising formalization of household finance, wider SIP-led retail participation, increasing awareness, digital access, and regulatory credibility collectively expanding the industry's asset-gathering capacity beyond cyclical market support.