Money Supply Has Grown Fast
In the last seven years, the total money supply in India has increased by about 120%. Money supply includes cash in hand, bank deposits, and post office savings. This means there is much more money in the system today than before. When more money is added, it slowly pushes prices higher across the economy.

Stock Market Rose at the Same Speed
During the same seven-year period, the Nifty index also went up by almost the same percentage as the money supply. This shows that the stock market growth has only matched the rise in money available in the economy. It did not grow much faster than the extra money that was created.

Why This Matters
If the stock market only grows as much as money supply, it means there is little real value creation. Prices look higher, but in real terms, people may not be getting richer. It is like buying something for ₹100 and later seeing its price become ₹120, but your buying power stays the same.

Inflation Makes Growth Look Bigger
When governments keep increasing money supply, inflation slowly rises. As inflation rises, the price of everything goes up. This makes people feel happy because asset prices and index levels rise. But this rise is often just due to inflation, not real improvement in value.

How to Judge Real Growth
Real growth happens only when the stock market grows much faster than money supply. Another way is when stocks perform much better than gold over a long time. If this does not happen, then most of the gains are only on paper.

The Big Picture
True wealth creation means your investments grow faster than inflation and money supply. Without that, higher numbers do not mean real progress. Understanding this helps investors stay realistic about what kind of returns they are actually earning.