Mark Dampier: 'It's time to jump on the growth train - India is changing rapidly'

It has been almost a year since the pro-business leader Narendra Modi and his Bharatiya Janata Party hailed a landmark election victory in India. For the first time ever, a centre-right government won an outright majority, and it has been active in its reform efforts to enhance the nation's economic potential and crack down on corruption.

The election spurred a prosperous year for India's stock markets. More recently the market has lost some ground, although this appears to be a healthy correction following such a strong run. This period of weakness has allowed fund managers such as Avinash Vazirani to find opportunities for value.

Mr Vazirani, the manager of the Jupiter India fund, believes the country is undergoing a transformation. The falling oil price has provided a tailwind, particularly as oil imports account for 36 per cent of India's total import bill. At the same time, inflation has turned negative yet interest rates remain at 7.5 per cent, so the manager expects to see rate cuts.

Meanwhile, domestic investors are returning to the stock market. According to Mr Vazirani, the savings pool in India is $600bn (£400bn) each year, of which only around 2 per cent was invested in shares last year. He expects this figure to increase over time – and recently, while foreigners have been selling shares, Indians have been buying.

One of the other significant changes has been the rollout of biometric IDs. This has helped realise Mr Modi's plan of providing a bank account for every Indian household, as the IDs are linked to the accounts and therefore benefits can be paid in directly.

The new Government has also recognised how bad the infrastructure is in India. Poor railways, for instance, mean that many goods perish on their way to their destination. With investment in infrastructure now rising, Mr Vazirani has put money into companies such as Texmaco Rail & Engineering, the biggest manufacturer of train carriages.

Mr Modi has also worked towards improving the efficiency of the country's civil servants, including ensuring that they turn up to work each day. The one thing the English left India with was bureaucracy, but perhaps Mr Modi now has something he can teach our politicians. He recently created a website that provides statistics on various government departments, such as how many workers are actually at their desks. He is apparently now the most hated man among civil servants.

He has also brought in reforms to cut out high-level corruption. Much of this had been pushed into the housing market and Mr Vazirani tells me this has led to a fall in house prices in Delhi of as much as 40 per cent.

While Mr Vazirani takes India's wider economic environment into account in managing the Jupiter fund, he also places an emphasis on individual companies – favouring entrepreneurial and government-controlled businesses as well as the subsidiaries of multinational companies.

The fund has a bias towards small and medium-sized companies, where around 50 per cent of the portfolio is currently invested. This positioning differentiates Jupiter India from many of its peers which tend to be concentrated in some of the country's largest companies.

India is changing faster than many people realise. A Government that is pro-business and truly investing in its growth, rather than wasteful spending, must surely make India one of the more attractive markets in the world.

Mark Dampier is head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more details about the funds included in this column, visit www.hl.co.uk