Nilesh Shah, MD, Kotak Mahindra Asset Management, talks about young Indians and their savings and investments behavior.
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00:00 So, let's remember that we are all descendants of Charvak and which mentioned that you should
00:16 drink ghee which was then considered status of wealth or power even by borrowing.
00:25 So to some extent our pandits have told us that borrowing is not bad.
00:31 Now obviously the connotation there was related to drinking of ghee by borrowing.
00:36 If you keep on drinking too much of ghee, likely that you will become fat, you will
00:40 have cholesterol, you will have diabetes, you will have blood pressure and that's not
00:44 good for your health.
00:46 So the message which Charvak even in that period mentioned was that drink ghee by borrowing
00:52 but keep a control over your borrowing, keep a cap over your borrowing.
00:57 Now by and large if you see overall Indians at least at the retail level, their debts
01:03 have been fairly negligible.
01:06 If I look at the auto loan book or the credit card loan book or the housing loan book, I
01:12 mean for the whole country of India it will be less than what is there in one province
01:17 of United States of America or one certain, some European nation.
01:23 So we haven't leveraged our future like in the developed world.
01:28 So I don't really see too much of a worry over there.
01:32 Of course there will be one or two occasional cases where someone is living out of credit
01:36 card.
01:37 I mean please stop that, that's not good for you.
01:42 There is a beautiful saying by Warren Buffet which says that income minus expenses is equal
01:47 to savings.
01:48 That's not true.
01:49 It is income minus desired savings equal to required expenses.
01:53 That's the equation to be followed.
01:55 By and large Indians are fairly conservative.
01:58 They are unlikely to leverage themselves significantly.
02:02 If you see the prepayment rate in most housing loans, most auto loans, it kind of gives you
02:06 confidence.
02:07 [Music]