BOMBAY STOCK EXCHANGE BROKERS' FORUM (BBF) | MUMBAI, INDIA
MAY 2024 | VOLUME: 13 • ISSUE NO. 2 •
INSIDE:
Decoding Liquid ETF
India's Silver Economy: Retirement to Reinvention
SEBI's Impact on India's IPO Market: Growth and Transparency
Digitization of Private Company Securities
10 Hacks to Develop
a Growth Mindset
for Leaders
FORUM VIEWS - MAY 2024
EXECUTIVE COMMITTEE
GOVERNING BOARD MEMBERS
BOMBAY STOCK EXCHANGE BROKERS’ FORUM (BBF)
GOVERNING BOARD 2023 - 24
FORUM VIEWS - MAY 2024
Ajit Sanghvi
MSS Securities
Pvt. Ltd.
Cyrus Khambata
Paytm
Money Ltd.
Ashish Rathi
HDFC
Securities Ltd.
Kamlesh Jhaveri
Jhaveri
Securities Ltd.
Ketan Marwadi
Marwadi Shares
& Finance Ltd.
Rajiv Kejriwal
SBICAP
Securities Ltd.
Purav Fozdar
Axiom Share
Broking Pvt. Ltd.
Neeraj Choksi
NJ India
Invest Pvt. Ltd.
Parth Nyati
Swastika
Investmart Ltd.
Dr. Pravin Bathe
Angel
One Ltd.
Kranthi Bathini
WealthMills
Securities Pvt. Ltd.
Vivek Gupta
GEPL Capital
Pvt. Ltd.
Virender Mansukhani
Mansukh Securities
and Finance Ltd.
Uttam Bagri
BCB Brokerage
Pvt. Ltd.
Tejas Khoday
Fyers Securities
Pvt. Ltd.
KISHOR KANSAGRA
Chairman | BBF
Pragya
Securities Pvt. Ltd.
KUSHAL SHAH
Jt. Secretary | BBF
Ratnakar
Securities Pvt. Ltd.
RAJIV CHOKSEY
Treasurer | BBF
KR Choksey Shares
& Securities Pvt. Ltd.
ANURAG BANSAL
Vice Chairman | BBF
SMC Global
Securities Ltd.
NIRAV GANDHI
Secretary | BBF
JM Financial
Services Ltd.
Saurabh Jain
SSJ Finance &
Securities Pvt. Ltd.
S. P. Toshniwal
Sunlight
Broking LLP
Roopkishor Bhootra
Anand Rathi Shares &
Stock Brokers Ltd.
Santosh Jayaram
GROWW
Shripal Shah
Kotak
Securities Ltd.
Ajay Kejriwal
Choice Equity
Broking Pvt. Ltd.
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FORUM VIEWS - MAY 2024
06
Your
Questions
Answered
DECODING LIQUID ETF
WHEN THE ONLY OPTION IS NOT FORWARD!
BBF Steering Committee
Kishor Kansagra (Chairman)
Anurag Bansal (Vice Chairman)
Nirav Gandhi (Secretary)
Rajiv Choksey (Treasurer)
Kushal Shah (Jt. Secretary)
Concept, Production and Editorial: Dr. Vispi Rusi Bhathena, PhD (h.c.)
Publisher Name: Dr. V Aditya Srinivas | Nationality: Indian
Address: BSE Brokers Forum, 808-A, 8th floor, P.J. Towers, Dalal Street, Fort, Mumbai - 400001. Maharashtra
Printer Name: Dr. V Aditya Srinivas | Nationality: Indian
Address: BSE Brokers Forum, 808-A, 8th floor, P.J. Towers, Dalal Street, Fort, Mumbai - 400001. Maharashtra
Editor Name: Dr. V Aditya Srinivas | Nationality: Indian
Address: BSE Brokers Forum, 808-A, 8th floor, P.J. Towers, Dalal Street, Fort, Mumbai - 400001. Maharashtra
Place of Publication: BSE Brokers Forum, 808-A, 8th floor, P.J. Towers, Dalal Street, Fort, Mumbai - 400001.
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Maharashtra
Design & Layout: Harshad Gajera
10 Feature
INDIA'S SILVER ECONOMY:
RETIREMENT TO REINVENTION
SEBI'S REGULATORY EVOLUTION AND TECH
ADVANCEMENTS SHAPING INDIA'S IPO MARKET
INTO A NEW ERA OF GROWTH AND TRANSPARENCY
DIGITIZATION OF PRIVATE COMPANY SECURITIES:
AN ANALYSIS
WHEN DOES A CONTRACT EXIST?
COMPLIANCE CALENDAR
18
Regulatory
Compliance
Leadership,
Empowerment
& Lifestyle
20
10 HACKS TO DEVELOP A GROWTH
MINDSET FOR LEADERS
EXPLORING THE SERENITY OF PRANAYAMA: A JOURNEY
INTO THE ANCIENT ART OF BREATH CONTROL
CLEANSE YOUR SPACE
Dr. Vispi Rusi Bhathena, PhD (h.c.)
Chief Executive Officer
Dr. V. Aditya Srinivas
Chief Operating Officer
and Chief Economist
The Intersection of Politics and Economy: India's Path to a $10 Trillion Economy: As the countdown begins towards the
eagerly anticipated nationwide elections in the world's largest democracy, India finds itself at a pivotal moment in its
economic journey. The upcoming election results in June are not just about political shifts; they hold the key to shaping
policies that will chart India's course towards becoming a $10 trillion economy. Economists and market participants are
keenly observing these developments, recognizing the potential influence on economic growth and stability.
Examining the Current Economic Landscape: Despite certain global headwinds, India's economy stands on a robust
footing. Recent economic indicators showcase promising growth trends, bolstering optimism for the nation's economic
prospects. However, these developments unfold against a backdrop of global market dynamics influenced by major
economies such as the United States and Japan. In the United States, the latest data reveals a significant uptick in inflation
to 3.2%, extinguishing hopes for a rate cut in March 2024. The Federal Reserve, confronted with mounting inflationary
pressures, maintains a firm stance on interest rates, which currently stand at 5.25%.The prospect of rate cuts is contingent
upon inflation moderating towards the Fed's 2% target zone, with any potential adjustment likely towards the latter part
of 2024.
FROM
THE
BBF SECRETARIAT
Conversely, Japan's recent decision to raise interest rates to 0.1% after 17 years aims to address inflationary concerns.
This move, while impacting borrowing costs for consumers and businesses, has also triggered a weakening of the yen
against the dollar. This fluctuation benefits exporters but poses challenges for consumers facing increased import costs.
In India, the Reserve Bank of India (RBI) has adopted a cautious approach by maintaining the repo rate at 6.5%. The RBI's
'wait and watch' strategy hinges on monitoring inflation trends closely before contemplating any policy adjustments.
Concerns persist about potential inflationary upticks in the coming months, underscoring the central bank's prudent
stance.
Positive Economic Indicators: India's core sector, encompassing vital industries like coal, crude oil, steel, and cement,
registered a robust growth rate of 6.7% in February, marking a notable improvement from January's figures. This
expansion underscores the resilience of India's industrial base and its capacity for sustained growth. Furthermore, global
financial institutions like Morgan Stanley have revised India's GDP growth forecasts upwards, citing the nation's inherent
strengths and stability. Projections for FY25 reflect this confidence, with GDP growth estimates revised to 6.8% from
6.5%. The current fiscal year (FY24) is also poised for robust growth, with estimates revised upwards to 7.9%.
Navigating Dynamic Economic Realities: As stakeholders await the election outcomes and monitor global economic
dynamics, it is evident that India's economic landscape is subject to multifaceted internal and external factors. The
interplay between policy decisions, market forces, and geopolitical developments will continue to shape India's economic
trajectory. The road to a $10 trillion economy necessitates astute policy formulations that balance growth imperatives
with fiscal prudence. As India positions itself as a global economic powerhouse, policymakers face the challenge of
leveraging inherent strengths while mitigating external risks.
Looking Ahead: In the coming months, as election results unfold and global economic conditions evolve, the narrative of
India's economic narrative will unfold. It is imperative for stakeholders to remain attuned to developments that shape
India's economic future. Stay tuned for further analysis and updates as India navigates through these pivotal times on its
transformative economic journey.
Conclusion: The confluence of politics and economics in India underscores the intrinsic link between governance and
economic outcomes. As the nation aspires to achieve monumental economic milestones, the upcoming elections serve as
a crucial juncture that will define India's trajectory towards realizing its $10 trillion economic vision.
FORUM VIEWS, MAY 2024 edition
From
to You...
BBF
FORUM VIEWS - MAY 2024
FORUM VIEWS - MAY 2024
ndia's financial landscape has been evolving at an
unprecedented pace in recent years. Among the notable
Idevelopments is the growth of Exchange-Traded Funds
(ETFs), a versatile financial instrument gaining traction among
investors. Within the realm of ETFs, the go-to option for parking
funds for a very short period has been the liquid ETF. Over the
years, liquid ETF has emerged as an attractive option, given
their minimal risk and optimal returns considering the tenure.
A liquid ETF, or Exchange Traded Fund, as the name suggests,
is a mutual fund whose units are traded on the stock exchange.
They invest in low risk overnight securities like Collateralized
Borrowing and Lending Obligations (CBLO), Repo and Reverse
Repo securities. The aim of a liquid ETF is usually to provide an
income commensurate with low risk, but at the same time,
providing a high level of liquidity.
When a stock market investor liquidates or sells off his
investment, he faces two issues before he reinvests his money
into a new stock. If you place your sell order on day 1. The stock
gets debited from your Demat account on day 2, and you
receive your sell proceeds in your margin account on day 3.You
can now keep the money in your margin account until you find a
new investment or initiate a payout to your bank account.
Now, as a stock market investor, your first dilemma will be that
this money will stay idle in your margin account and not earn
any interest and therefore not give you any returns. And the
second is that you will also have to spend a considerable
amount of time and energy in transferring money between your
trading account and your bank account.
Liquid ETF addresses these concerns, so when you place your
sell order on Day 1, you can simultaneously buy liquid ETF units
on the same day. On Day 2, your stocks are debited from your
Demat account and on Day 3 the liquid ETFs will be credited to
your Demat account and you will start earning returns in the
1. What are liquid ETFs? How does it help an investor
using this instrument?
form of daily income. So no money will sit idle. This basically
allows investors in the liquid ETF to start receiving returns on
their investments from the date of settlement of their trade.
Saket Kumar
Co-Founder
ETF Junction
DECODING LIQUID ETF
India's financial landscape has been
evolving at an unprecedented pace in
recent years. Among the notable
developments is the growth of
Exchange-Traded Funds (ETFs), a
versatile financial instrument gaining
traction among investors. Within the
realm of ETFs, the go-to option for
parking funds for a very short period
has been the liquid ETF.
2. What are the advantage the product, Liquid ETF offers
for any Investor?
Liquid ETF provides many advantages for an Investor, they are
• Help earn more returns: Your money is always earning you
interest, rather than sitting idle in the margin account or
earning negligible to no returns in a savings account. Also,
as soon as the settlement of the trade is cleared, liquid ETFs
start giving returns thus avoiding days of lost returns.
• Highly liquid: It is highly liquid, so you’ll be able to invest
when you find an attractive investment opportunity. You
FORUM VIEWS - MAY 2024
can buy and sell liquid ETFs both from the market as well as
the issuing Mutual Fund.
• Saves effort: Investors no longer need to make
unnecessary transactions or move money between the
trading account and the bank account. Liquid ETFs also
help avoid the need to go through the trouble of waiting for
cheques to clear, or making electronic transfers to a trading
account.
4. Can Liquid ETF be used for the stock margin
requirements? What percentage of Liquid ETF can be used
as margin money?
5. What are the things one should be careful about when
investing in Liquid ETF for any Investor?
6. How many Liquid ETFs are there presently and what is
the total size of the Industry?
Yes, Liquid ETF can be used for stock margin, this instrument is
approved by stock excahnges to be used as stock margin.
Approximately 90% of the amount can be used as margin
money.
Ans-Investors needs to be careful about, these things when
buying Liquid ETFs.
• Brokerage charges: Investors may have to pay brokerage
while purchasing liquid ETF units, and brokerage charges
vary from broker to broker. Most brokers may not charge
any brokerage on the purchase of these products thereby
increasing their appeal for investors. It is advisable for
investors to confirm the brokerage amounts that they will
be charged on trades in liquid ETF before making a
purchase. Besides, not only are liquid ETFs convenient to
purchase and hold, it is much quicker than moving money
between your bank and the broker.
• Fractional units: Liquid ETFs give returns in terms of
increase in units, which can add small fractions to existing
holdings; fractional units cannot be sold on the Exchanges.
However, the issuing mutual fund (MF) house purchases
back the fractional units
• As Liquid ETF fall under the category of Specified Mutual
Funds (Whose exposure to domestic equity shares is less
than 35%), any investment made after April 01,2023 will be
deemed as short term asset and will be taxable as per
income slabs applicable to investor.
The Liquid ETF is in the early stage as a product. Presently there
are around 10 liquid ETFs. The total size is approximately
18000cr. But with strong increase in the demat accounts as
being seen and more investors adding up to equity investing,
the product has a very strong future prospect.
• Can be used for margin: While buying or selling stocks, it
takes 3 days to complete a trade. To avoid the
inconvenience of issuing cheques or making electronic
transactions each time, some traders keep some margin
with their brokers. However, this margin (money) does not
earn any returns. You could purchase liquid ETF units worth
the margin you want to maintain and earn returns till the
time it is used to purchase stocks.
• Flexibility: Investors can use liquid ETFs for various
purposes, including as a parking place for idle cash, an
alternative to savings accounts, or as a short-term
investment option.
Liquid ETFs are suitable for both retail traders and investors. It
is being used by Portfolio Management Services (PMS)
providers, Futures & Options (F&O) brokers and institutions
which invest directly in equities. These funds are also suited to
the needs of High Net Worth Individuals (HNIs) as many times,
these investors may have funds lying idle either in a trading
account or they may be maintaining margin money with their
brokers on which no returns are earned. By parking funds in
liquid ETFs, investors can earn returns on idle funds while also
remaining liquid to benefit from attractive investment
opportunities. Liquid ETFs can help make trading more
profitable if used in the right manner. And that too, in a much
easier and convenient way!
3. Who should be using these Investment instrument? Is it
focussed for any specific investor segment(stock traders)
and why?
The Liquid ETF is in the early stage as a
product. Presently there are around 10
liquid ETFs. The total size is
approximately 18000cr. But with strong
increase in the demat accounts as being
seen and more investors adding up to
equity investing, the product has a very
strong future prospect.
With over 25 years of exemplary experience in the Mutual Funds industry, Saket
is a seasoned professional with a proven track record of building successful
organizations from the ground up. As a visionary Co-Founder of ETF Junction
since January 2022, he has led the establishment of a thriving platform,
revolutionizing the investment landscape for ETFs.
His journey began in 1997 at Kothari AMC, India’s first private sector mutual
fund, where he played a pivotal role in establishing the Mutual Fund business in
the Eastern part of India. Subsequently, as Zonal Manager for Franklin Templeton
and Zonal Head for Bharati Axa Investment Managers, he showcased
exceptional leadership in driving growth and fostering client-centricity.
In 2013, he founded Rastey Commuting Services, transforming it into a
prominent player in transportation across India over nine successful years. The
company was awarded at the BID convention awards in Paris in 2019,
recognized as the best in quality service among car rental services in India.
Saket completed his management education at IIM Kolkata in 2000. His
extensive expertise lies in navigating the complexities of the Mutual Funds
domain and orchestrating organizational expansion. With an unwavering focus
on innovation and excellence, he is committed to making a significant impact on
the Mutual Funds industry.
FORUM VIEWS - MAY 2024
he realm of options, futures, swaps and forwards is still a
largely undiscovered landscape fraught with regulatory
Tuncertainties. The Securities Exchange Board of India
(“SEBI”) has itself had to constantly update the relevant
regulations with this changing landscape. Judicial
pronouncements by various courts also aid in clarifying the
hitherto unknown situations involving option, future, swap and
forward contracts.
The above four contracts are types of derivative contracts.
Section 2 (ac) of the Securities Contracts (Regulation) Act,
1956 (“SCRA”) defines “derivatives” to include (A) a security
derived from a debt instrument, share, loan, whether secured
or unsecured, risk instrument or contract for differences or any
other form of security; (B) a contact which derives its value
from the prices, or index of prices, of underlying securities; (C)
commodity derivatives; and (D) such other instruments as
may be declared by the Central Government to be derivatives;
As per Section 2 (d) of the SCRA, “option in securities” is
defined as a contract for the purchase or sale of a right to buy
or sell, or a right to buy and sell, securities in future, and
includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put
and call in securities. Futures contract is a contract to buy or
sell a commodity asset, or security at a predetermined price at
a future date. A forward contract is a customized contract
between two parties to buy or sell an asset at a specified price
on a future date. Though, the definitions of forward and futures
contract sound the same, there is a marked difference
between them. Futures are traded publicly on exchanges
whereas forwards are privately traded. Swaps derivatives are
customizable derivative contracts between two parties to
exchange liabilities or cash flows.
When SCRA was enacted, Section 20(1) (since omitted) had
1. What are option, future, swap and forward contracts?
2. What is the legislative history pertaining to the legal
status of options in India?
provided that, “Notwithstanding anything contained in this Act
or in any other law for the time being in force, all options in
securities entered into after the commencement of this Act
shall be illegal”. Section 16 of the SCRA provided that if the
Central Government is of opinion that it is necessary to prevent
undesirable speculation in specified securities in any State or
area, it may, by notification in the Official Gazette, declare that
no person in the State or area specified in the notification shall,
save with the permission of the Central Government, enter into
any contract for the sale or purchase of any security specified
therein. Further, Sub-section (2) of Section 16 of SCRA
declares that all contracts in contravention of the provisions of
sub section (1) entered into after the date of the notification
issued thereunder shall be illegal. Thereafter, a notification No.
S.O. 2561, dated June 27, 1969, titled ‘Restriction on Enter into
Contract for Sale or Purchase of Securities’ was issued by the
Ministry of Finance, Government of India under section 16 of
the SCRA, which inter alia provided that any contract for sale
or purchase of securities, other than such spot delivery
contract or contract for cash or hand delivery or special
delivery in any securities will be prohibited. Thus, forward
contracts and options were considered illegal.
By virtue of the Securities Laws (Amendment) Act, 1995,
Section 20 of SCRA was omitted, however, the 1969
notification continued to be in force which prohibited forward
contracts other than spot delivery contracts. In February,
2000, Section 18 A was introduced in the SCRA which
provided that notwithstanding anything contained in any other
law for the time being in force, contracts in derivatives shall be
legal and valid if such contracts are traded in a recognised
stock exchange and settled on the clearing house of the
recognised stock exchange in accordance with the rules and
bye laws of such exchange. Definition of the term “derivative”
was introduced and an amendment was made to the definition
of “securities” to include derivative. On 1st March, 2000 by
Notification No. SO184 (E), issued under section 16 of SCRA,
SEBI prohibited the entering of any contract for sale or
WHEN THE ONLY OPTION IS NOT FORWARD!
Zerick Dastur
Founder
ZERICK DASTUR,
ADVOCATES AND SOLICITORS
FORUM VIEWS - MAY 2024
purchase of securities, other than spot delivery contracts,
contracts for cash/hand delivery/ special delivery, and
derivatives contracts.
On 3rd October, 2013 by Notification No. G.S.R 219(E), issued
under section 16 of SCRA, SEBI inter alia rescinded the 1969
Notification and for the first time inter alia permitted contracts
in shareholders agreements or provisions in the articles of
association, providing for purchase or sale of securities
pursuant to the exercise of an option contained therein to buy
or sell the securities, on the terms and conditions set out
therein (i.e. put/ call options). The above Notification also
provided that nothing contained in the said notification shall
affect or validate any contract which has been entered prior to
the date of the said notification. The explanation to the said
Notification clarified that the above contracts will be valid
notwithstanding anything contained in section 18A.
The above legislative history finally culminated into the
landmark judgement dated 2nd February, 2023 passed by the
Division Bench of the Bombay High Court, in Percept
Finserve Private Limited v. Edelweiss Financial Services
Limited (2023 SCC OnLine Bom 319) which finally put to rest
the controversy surrounding enforceability of put options.
Edelweiss Financial Services Limited (“Edelweiss”) entered
into a share purchase agreement (”SPA”) with Percept
Finserve Private Limited (“Percept Finserve”) for purchase of
certain shares of Percept Limited in 2007 i.e. much before the
2013 Notification. The SPA contained certain conditions
subsequent that had to be fulfilled by Percept Limited and
Percept Finserve. The SPA contained a Put Option whereby an
option was given to Edelweiss to re-sell the shares of Percept
Ltd. to Percept Finserve for a purchase consideration of INR 20
crores along with 10% of internal return of rate, if there was a
breach of certain conditions subsequent as per the SPA.
As the conditions subsequent were not fulfilled, Edelweiss
exercised its Put Option, and issued a letter calling upon
Percept Finserve to give effect to the Put Option. As Percept
Finserve did not honour the exercise of the Put Option,
Edelweiss commenced arbitration proceedings. The sole
arbitrator in his award concluded that Percept Finserve and
Limited had in fact breached their obligations under the SPA,
but rejected Edelweiss's Put Option claim on the ground that
the same was illegal. The arbitrator held that the Put Option
was illegal as a) it constituted a forward contract, which is
prohibited under Section 16 of SCRA read with SEBI’s March
2000 circular; and Put Option being a contract in derivatives
and not being traded on recognised stock exchange in
accordance with Section 18-A of the SCRA was illegal.
The Award was challenged by Edelweiss under Section 34 of
the Arbitration and Conciliation Act, 1996 (“Act”) and was set
aside by the Bombay High Court on 27th March 2019. An
Appeal was thereafter filed before the Division Bench by
3. What was the landmark judgement passed by the
Bombay High Court in the matter of Percept Finserve
Private Limited v. Edelweiss Financial Services Limited?
Percept Finserve under Section 37 of the Act against the order
of the single bench. The division bench expressed complete
agreement with the views of the single judge in holding that
the Put Option was legal and enforceable. The Court placed
reliance on a previous discussion in MCX Stock Exchange
Limited v. SEBI (2012 SCC OnLine Bom 397), which held that
an ‘option’ is in the nature of a privilege, the exercise of which
is dependent on the discretion of the person who has been
granted the option. In case of an option, a concluded contract
arises only upon exercise of the option. It was thus held that
contract for repurchase of shares by Percept Finserve will
arise only on the exercise of the Put Option by Edelweiss upon
non - fulfilment of the conditions subsequent.
A further question that came up before the Bombay High Court
was whether the options contained in the SPA were contrary
to section 18 A of the SCRA. The Court held that Section 18 A
never prohibited entering into a call or put option but only
regulated trading or dealing in such option as a security. It was
also reiterated by the Court that put option clauses like the Put
Option in this case will be enforceable under the scheme of the
SCRA, irrespective of whether the underlying agreement is
executed prior to, or post the Notification issued by SEBI in
2013.
By the aforesaid judgement a crucial aspect of securities and
commercial law which plagued parties and the regulator in
equal proportion for decades was finally answered. This
judgement ensures that put and call options are considered
valid and enforceable irrespective of the change in law and
passing of several notifications.
Zerick Dastur is Proprietor of the Law Firm, practicing in the field of Court
litigation, Dispute Resolution, Arbitration, Securities law and Competition Law.
He is a triple Gold Medalist from Mumbai University having topped the Mumbai
University in Law. His practice covers diverse areas of Corporate, Commercial,
Securities law and Regulatory disputes. He is representing a number of clients in
the Port Sector, Infrastructure and Mining Sectors. He has represented clients in
domestic and international, commercial arbitration matters. He handles a
number of cases relating to securities law litigation and SEBI. He was a former
Partner at the Law Firm, J. Sagar Associates.
He has litigation experience before the Hon’ble Supreme Court, various State
High Courts Statutory Tribunals and Regulators. He has been involved in a
number of matters involving issues of Constitution Law. He has been involved in
landmark matters involving defence of Auditors and Corporate clients before
various Regulators/Civil/Criminal Courts and Tribunals in connection with
Corporate frauds. He has also advised various clients in matters involving
shareholder disputes and minority actions before the NCLT and CLB.
He also practices Securities Law and appears before the Securities Appellate
Tribunal and the SEBI. He has advised clients in connection with Competition
Law issues in everyday business operations including issues relating to anti-
competitive agreements and abuse of dominance by enterprises.
He writes for various newspapers and publications on issues relating to
Corporate law, Arbitration, Commercial and Competition Law. He regularly
writes on securities law for the publication run by the Bombay Stock Exchange
Brokers Forum. He is a regular speaker at events organised by Economic Times,
VC Circle, Indian Merchant Chambers, Consumer Resources, Corporate
Knowledge Foundation and the World Zoroastrian Chamber of Commerce.
He is a Member of the Law Committee of Indian Merchant Chambers and was
involved in the drafting of the Rules for the IMC International Arbitration Centre.
Views of the author are personal and do not constitute legal advice.
(Advocate Zerick Dastur and Advocate Smriti Singh)
Feature
INDIA'S SILVER ECONOMY:
RETIREMENT TO REINVENTION
STRATEGY
OPERATIONS
TACTICAL REALITY
ith proper planning and foresight today, India's silver economy can significantly
contribute to the country's GDP in the coming days. Senior or Silver Citizens must
Wreimagine their next 40 years and actively participate in the new emerging
narrative as Contributors.
By enabling older adults to remain active and engaged members of society, economies can
benefit from their continued contributions through Retirement 2.0 - i.e., life post 80 years.
The concept of a silver economy is relatively new, but its potential impact is immense. In
simple terms, the silver economy refers to the economic contribution of senior citizens in a
country. With India's population rapidly aging, and we all see this trend among our families,
people live much longer, healthier, and more active lives than ever. The silver economy
could be vital to the country's economic growth. At Dhiraa, we believe that with proper
planning and foresight today, India's silver economy can significantly contribute to the
country's GDP in the coming days. But for this to happen, Silver Citizens (defined as
individuals over 60 years) today need to reimagine their next 40 years.
In their report "The New Map of Life, 100 Years to Thrive," The Stanford Centre on Longevity
states that by the middle of this century, living to 100 will become very common, reflecting
the doubling of human life expectancy between 1900 and 2000. The report emphasizes
that it is essential to invest in future centenarians by optimizing each stage of life so that
benefits can compound for decades ahead while allowing for more time to recover from
disadvantages and setbacks in the journey.
Societies and Silver Citizens must reinvent and optimize themselves in this new age.
Reinventing and optimizing through proper long-term financial fitness and upskilling will be
critical factors in achieving financial security over the long term. This is essential for
maintaining a high quality of life in retirement and avoiding financial strain on social
support systems. Let us explore the ramifications a bit further.
In India, the retirement age is 60 (Retirement 1.0), but with advancements in healthcare
and longevity, people are living much longer than before. As per the World Population
Prospects 2022 (United Nations, 2022), by 2050, the number of persons aged 65 years is
projected to be more than twice the number of children under age 5. Now, more than ever,
senior citizens have more productive years to actively contribute to the economy rather
than sit back and retire. There we are at a juncture where the silver economy comes in - it
provides various opportunities for seniors to continue working, earning, saving, and
investing while also allowing them to be flexible and comfortable in their way of living.
A report of the Expert Committee on Longevity Finance in 2022 aiming to chart a long-term
vision for setting up a Longevity Finance Hub in GIFT IFSC states "that Gift City IFSC could
take the lead in 'longevity,' a relatively unexplored way of looking at business, targeting
untapped customers and providing customized services. Progressive investment banks,
pension funds, and insurance companies are already developing new business models to
cater to the Longevity industry." So clearly, far-sighted governments, businesses, and
society are breaking the stereotype of the retired Indian today and are recognizing and
harnessing the silver economy's power for the country's betterment. This includes
initiatives such as age-friendly workplaces and homes, lifelong learning opportunities, and
The Power of the Silver Economy: Silver Citizens must reimagine their next 40 years.
Why Silver Economy: it's high time we say, Why Not?
'Retirement' is Just a Number
Beyond Consumers to Contributors: Recognize their contribution to the Economic
Bottom Line
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FORUM VIEWS - MAY 2024
MONA
KWATRA
Co-Founder
DHIRAA
SKILLDEV
PRIYA
SUBBARAMAN
Co-Founder