India won political freedom in 1947. Financial freedom is the next frontier

Every 15th of August, we celebrate the freedom India won in 1947, the right of a people to govern themselves. There is another freedom, quieter and still being won, worth a thought on the occasion of our Independence Day. It is the freedom of an ordinary household to provide for itself, to educate a child, own a home and retire in dignity, from its own savings. Political freedom was won for us on the fifteenth of August. Financial freedom is earned household by household, and India is relatively closer to it today than ever before. Interestingly, its foundations were laid even before India's independence as India's capital markets took root long before 1947. In 1875, a group of Indian brokers pooled their own capital to establish Asia's first stock exchange in Bombay, ahead of Tokyo, Shanghai and Hong Kong, on a street named in our own language: Dalal Street. Capital markets are not an import into India. Yet for most of the century and a half since, they were accessed by a few, while household wealth sat in gold and land.

Jan Dhan Yojana and Digital Public Infrastructure have been gamechangers. India today has internet and smartphone access few countries can match, at among the lowest data costs anywhere. Aadhar made verification quick and paperless, and UPI made money move instantly at any hour. In June this year, UPI carried 22.72 billion transactions worth Rs 28.92 lakh crore, against 2.81 billion worth Rs 5.47 lakh crore in the same month five years ago. UPI is not only a payments system. An SIP mandate can now be authorised on UPI app, and a fund purchase can be done on UPI too.

Ease of investing owes as much to the regulator and the industry as to technology. Successive reforms have widened what an ordinary saver can reach. Today, Rs 250 starts an SIP. One can invest in Gold and silver through an ETF, hold a share in a highway or office tower through an investment in a REIT or InvIT. The minimum investment in a corporate bond has fallen from Rs 10 lakh in 2022 to Rs 10,000 today. Nearly every asset class is now within reach of nearly every citizen, in almost any amount.


Mutual fund assets have grown six-fold in ten years to cross Rs 82 lakh crore, and the monthly SIP book has grown tenfold to over Rs 30,000 crore from more than 10 crore accounts. A rising share of that money comes from beyond the thirty largest cities, one in four investors is a woman, and many are in their twenties, starting with their first salary.

India's financialisation journey has come a long way and yet has far to go. Mutual fund assets here are about a quarter of GDP; in the United States they exceed the size of the economy. Around 6 crore Indians invest in mutual funds, in a country of 140 crore. Investor education has been pivotal to the journey so far and will be just as critical to the next leg of it. Years of patient work by the industry, the regulator and thousands of distributors and advisers have gone into explaining the power of compounding, the value of a long horizon, and the behavioural biases that trip up even seasoned investors.

The change in behaviour is the most telling of all. In March this year the Sensex lost over 11 per cent in a single month, yet SIP contributions that month touched a record Rs 32,087 crore. Equity schemes have seen net inflows for more than 60 months in a row, a run that has weathered a pandemic, the war in Ukraine, conflict in West Asia and heavy foreign selling. Today's investor is more likely to keep the instalment running and treat a fall as a chance to accumulate. The simplicity of the SIP helps, since the investor decides once and the instalment then runs on its own, including in the months when many would otherwise have hesitated.

Resilient domestic flows have changed the ownership structure of the market itself. As of March 2026, DIIs held about 20 per cent of Indian listed equities against 16 per cent with FPIs. In March 2016 it was the other way around, 12% against 21. A market once dominated by foreign investors now has a domestic anchor of its own.

Seventy-nine years ago, India took charge of its own destiny. Today, its citizens are on the path to financial freedom, household by household, one SIP at a time, one financial goal at a time.

(Navneet Munot is MD & CEO at HDFC AMC.)

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