India's economic growth is set to be driven by strong domestic consumption and public spending, according to a Crisil report. Rising per-capita income is expected to boost savings and investment, placing India on a higher growth path by 2030.
India's Economic Growth Outlook
India’s medium-term economic growth is expected to be driven by strong domestic consumption, sustained public infrastructure spending and a revival in private investment, while rising per-capita income is likely to sustain this growth and support a higher growth trajectory by 2030, according to a report by Crisil.
The report noted that the International Monetary Fund (IMF) projects India’s per-capita GDP to grow by more than 9 per cent between 2027 and 2030, supported by rising incomes and productivity gains. As per-capita income rises, “households” are expected to allocate more funds towards savings, leading to greater participation in market-linked investments. This, in turn, is expected to support investment and financial market development while sustaining the country’s economic momentum.
“By 2030, India’s rising per-capita income should position the country for a higher growth trajectory and a more prominent place in the global economy,” it said.
Shift in Household Savings to Mutual Funds
The report also highlighted a structural shift in the way Indian households allocate their savings, noting that an increasing share of the country’s large household savings pool is moving towards market-linked instruments, which has supported strong growth in the mutual fund industry.
“The share of mutual funds in gross flow of annual household savings rose from 3% in 2020 to 13% in 2025, signalling a structural shift in how savings are being intermediated.”
Notably, the expansion has been particularly strong in recent years, with mutual fund AUM more than doubling from Rs 31.43 lakh crore in March 2021 to Rs 73.73 lakh crore in March 2026.
Rapid AUM Growth
“The mutual fund (MF) industry’s assets under management (AUM) surged from Rs 31.43 lakh crore in March 2021 to Rs 73.73 lakh crore in March 2026, clocking an 18.60% CAGR. This outpaced bank deposits that grew 11.2% over the same period,” the report said adding the industry’s AUM touched a record Rs 82.03 lakh crore in February 2026.
Factors Driving MF Industry Growth
Crisil attributed this growth to “rapid digitalisation, higher financial literacy and a preference for systematic investment plans (SIPs).”
Overall, the report noted, this transformation indicates, “Rising formalisation of household finance, wider SIP led retail participation, growing awareness, digital access and regulatory credibility have collectively expanded the industry’s asset-gathering capacity beyond cyclical market support.”
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