If you go back to 1992, India invested almost Rs 10,000 crore in a year in equities. More recently in 2008, we invested Rs 50,000 crore in equities. This is a two trillion economy. The household savings is $500 billion a year and what are we getting right now? I mean we are getting may be $5 billion a year, that is 2% of household savings. So yes, we are moving in the right direction but I think we are a long way off from where we can say that Indians have begin to allocate .
If something happens in US, interest rates go up more than what the markets are discounting, it can lead to a small correction, it can lead to a short-term correction. It has happened in 2013 but a look at what opportunity 2013 presented and who told you in 2013 that that index is going to nearly double in the next two or three years. I feel that whenever these corrections happen, we should take full advantage of these.
The Indian economy has been compounding in nominal terms, in rupee terms between 14% to 17% a year for the last four decades and that is what the Sensex has also done exactly. The earnings are more cyclical. They depend on economic conditions. They depend on interest rates. They depend on commodity prices and they go through their ups and down. 2008 was a cyclical peak of profitability. 2014 or 2015 is a cyclical bottom of profitability. But these things do not change in a matter of but if you are patient, if you wait for two-three years, you will see it change. So I do not see any reason why, I mean this economy is not slowing down, it is accelerating.
The GDP growth, yes current year is a little low because inflation is low and real growth is yet to pick up but you ask any one of us, I think most would agree that the nominal GDP growth of India for next five-ten years should be close to 13-15% and I do not see a reason why the market should not compound at those rates because market cap to GDP is again quite low.