Key Points
Chief economic adviser (CEA) V Anantha Nageswaran Monday underscored India's bright growth prospects but cautioned against any excessive sway of financial market expectations over the country's policy and macroeconomic outcomes, as it moves forward to attain the developed nation status by 2047...
"When the market becomes bigger than the economy, it is natural-but not necessarily reasonable-that the considerations and priorities of the market dominate the public discourse and also influence the policy discourse," Nageswaran said at an event organised by the Confederation of Indian Industry in Mumbai..
"I am referring to the phenomenon called financialisation, or the financial market's dominance of policy and macroeconomic outcomes."..
India's stock market capitalisation is about 140% of its gross domestic product (GDP), he said.. Record financial sector profitability and elevated market capitalisation, or the market capitalisation to GDP ratio, often lead to financialisation...
