India's Economic Growth Prospects and the Risks of Financialization

India is poised for significant economic growth, but Chief Economic Advisor V. Anantha Nageswaran warns against the dangers of financialization, where financial markets dominate public policy. This can lead to increased debt and inequality, challenges already faced by developed nations. Experts stress the need for balanced financial growth and innovation.

India is on track to be one of the leading global economies, but Chief Economic Advisor V. Anantha Nageswaran has raised concerns over the country's financialization. Speaking at the CII Financing 3.0 Summit, he warned that allowing financial markets to overshadow economic policy could replicate the inequality and debt issues seen in developed nations.

With India's stock market capitalization at around 140% of its GDP, Nageswaran emphasized the need to avoid the pitfalls of financialization as the country aims for developed status by 2047. The priorities of financial markets might unduly influence public and policy discourse, potentially leading to increased public and private sector debt.

To sustain India's economic prospects, he suggests maintaining policy autonomy and ensuring the financial sector supports economic aspirations without falling into the traps seen in advanced economies. This includes developing the corporate bond market and leveraging new technologies to drive capital growth.

(With inputs from agencies.)