India is a developing country with a GDP growth rate which is good when you compare it with the developed nations and that is the reason why many people residing in the country as well as foreigners want to know what is the best way to invest money in India, well given below is the answer for it –
- Real estate or Land – One of the best ways to participate in the India growth story is by investing into real estate or land because when growth happens the price of land rises and another factor which contribute to real estate prices being stable even in recession which happened in the year 2008 is due to the high population which the country has and that does not allow the price of real estate to go down much and hence these factors make the real estate to be a relatively safe investment. Another advantage of real estate is that one can give his or her property on rent also because with the development in urban and semi urban centers the rental value of properties in these areas are also rising.
- Fixed deposits – Another alternative is the fixed deposit; the reason why one can look at this alternative is because of higher interest rates which are there in the economy. When one compares interest rates of developed nations like America and European nations where the interest rates are close to zero, in India it is above 9 percent and if you have idle cash then a risk free return of 9 percent is not bad.
- Equity markets – In the year 2008 when Indian equity markets were the darling of majority of investors all over the world and in India also many retail investors invested money however in the past 5 years Equity markets have not given good returns and many people have lost money. However things do not remain same forever and government of India is also trying its best to lure investors across the world as well as in India by starting schemes like Rajiv Gandhi Equity Savings Scheme, taking steps to reduce the fiscal deficit like deregulation of petrol, divestment of profitable public sector companies and so on. Hence if one wants to invest for long term he or she can pick the sectors which will be performing well in coming years and then invest in that company which is the leader within that sector.
- Debt Instruments – Since debt market of India is in development stage and government is also emphasizing and doing things to make debt markets more liquid and attractive for investors, people looking for alternative to fixed deposits can invest in the corporate fixed deposits and various tax free bonds which are issued by both public sector as well as privet sector companies.