Inside India’s Long Road To Becoming An Investor Nation. Only on the Simple Hai! Show

India’s journey from a nation of savers to an emerging investor economy is neither sudden nor simple. It is layered with history, habits, policy choices and deeply ingrained behaviour. That complexity came through clearly in the latest episode of Simple Hai!, where Co-founder and Editor-in-Chief Vivek Law sat down with Venkat N Chalasani, Chief Executive of Association of Mutual Funds in India (AMFI), for a grounded, data-backed conversation on how Indians think about money and why that mindset is slowly changing. With over four decades in banking and finance, including 37.5 years at State Bank of India, Chalasani brought both institutional memory and on-ground experience to the discussion. What emerged was not a sales pitch for mutual funds, but a realistic assessment of where India stands today and what it will take to truly become an investor nation.

A Career That Mirrors India’s Financial Evolution

Law opened the conversation by asking Chalasani to reflect on his long professional journey. From retail banking to treasury, international operations, risk and compliance, Chalasani’s career spanned 16 locations and oversight of more than 200 international offices. This exposure, he noted, gave him a ringside view of how India’s financial system evolved alongside the country itself.

That evolution, he explained, cannot be understood without revisiting the scarcity-driven India of the 1980s. Back then, even purchasing a scooter or a car involved waiting periods of six months to a year. Capital protection mattered more than capital growth. Saving was a survival instinct, not a strategic choice.

Also read: Saurabh Mukherjea: The Investor Who Refuses to Sugarcoat India’s Economic Reality

From Scarcity To Aspiration

Law contrasted that era with today’s India, where consumption, choice and opportunity look dramatically different. Chalasani agreed. He observed that while saving remains important, Indians are now increasingly willing to let money work for them. Investing is no longer seen as reckless or elite; it is slowly becoming aspirational.

One of his most meaningful postings, he recalled, was in rural Chhattisgarh, where he handled small IRDP loans of around 5,000 for livestock. The real success, he said, was not disbursing credit but ensuring income generation and repayment. Financial inclusion, in his view, is about enabling people to earn sustainably and climb the economic ladder, not just opening accounts.

How Big Have Mutual Funds Really Become?

When the conversation turned to numbers, Chalasani laid out the growth of India’s mutual fund industry in simple terms. Assets Under Management have risen from roughly 10 lakh crore in 2014 to over 75.6 lakh crore today. Despite this sharp rise, mutual fund AUM still represents only about 22 percent of India’s GDP.

Looking ahead, he said it is realistic for India to reach 50 percent of GDP in mutual fund AUM over the next 10 to 20 years. The reason is straightforward: mutual funds are growing at 15 to 20 percent annually, almost double the country’s GDP growth rate. Globally, the average AUM-to-GDP ratio stands at around 65 percent, while developed markets cross 130 percent. For India’s Viksit Bharat 2047 ambition, closing this gap is not optional.

Banks Versus Mutual Funds Is A False Debate

Law raised a concern often echoed in public discourse: Are mutual funds eating into bank deposits? Chalasani was clear that this is a misunderstanding of how money flows. Liquidity never exits the system. Funds invested through mutual funds eventually return to banks via bonds, equities, salaries and operational accounts.

India’s banking system, he stressed, remains strong and profitable, with improving Net Interest Margins. Mutual funds and banks are not rivals; they are complementary parts of the same financial ecosystem.

He illustrated this with household savings data. Out of every 100 saved, 66 goes into non-financial assets like gold and real estate. Only 34 enters financial assets. Of that, about 40 percent sits with banks, while just 5 to 10 percent flows into mutual funds. The implication is clear: the headroom for growth is massive.

Awareness Is Not The Same As Participation

Law then turned to findings from the SEBI–AMFI household survey. Chalasani highlighted a striking gap: while 63 percent of households are aware of at least one market instrument, only 9.5 percent actually invest. Urban participation is around 15 percent, with rural numbers significantly lower.

Fear of losing capital and the perceived complexity of markets remain key deterrents, especially for first-time and younger investors. Yet there is reason for optimism. Around 22 percent of households expressed intent to invest within the next year, suggesting that awareness may soon convert into action if supported correctly.

Taking Distribution And Education Seriously

To bridge this gap, AMFI is focusing on both reach and trust. Chalasani spoke about the shortage of active distributors despite over three lakh registered ones. As a solution, AMFI has signed an MoU to train one lakh postmen as mutual fund distributors, leveraging their credibility in Tier 2 and Tier 3 regions. In a pilot batch, 19 out of 35 cleared the NISM 5A certification.

He also highlighted collaborations with institutions such as IIM Bodh Gaya, IIM Shillong, IIM Visakhapatnam and XIM Bhubaneswar. AMFI has adopted four states where final-year students are trained, certified and supported to enter distribution as a profession.

Incentives, Policy and Behaviour

On incentives, Chalasani explained that distributors are rewarded for small SIPs that remain invested for at least two years. Additional incentives apply for investors from cities beyond the top 30 and for first-time women investors.

On policy advocacy, he shared AMFI’s pre-budget discussions with the government, including requests to restore indexation benefits on fixed-income products and to consider waiving long-term capital gains tax for investments held beyond five years. The goal is simple: encourage patience and long-term behaviour.

Behaviourally, he noted, women investors tend to stay invested longer than men. Goal-based investing, such as saving for education or retirement, naturally increases holding periods and improves outcomes.

The Long Game Of Wealth Creation

As the episode drew to a close, Law asked what truly builds wealth over time. Chalasani’s answer was unequivocal. Over the last 30 years, equity has consistently outperformed gold, real estate and fixed deposits. Wealth is created not by timing the market, but by staying invested.

Echoing a principle often attributed to Warren Buffett, he summed it up simply: save first, then spend what remains. For India to genuinely participate in its own growth story, households must move beyond safety alone and embrace long-term investing with discipline and patience.

The episode offered a clear-eyed view of India’s financial transition. Through data, lived experience and policy insight, it showed why the move from saving to investing is slow, why it matters, and why mutual funds are increasingly central to India’s economic future.