Chief Economic Advisor Warns Against 'Financialisation' as Stock Market Soars

Chief Economic Advisor V Anantha Nageswaran has warned against the rising dominance of financial markets over public policy, a phenomenon he terms as 'financialisation'. He emphasized that while India has promising economic prospects, unchecked financialisation is contributing to growing inequalities. Congress has called for policy responses to address this issue.

Chief Economic Advisor V Anantha Nageswaran has cautioned against the increasing 'financialisation'—the dominance of financial markets in public policy. According to him, this phenomenon is intensifying economic inequalities, necessitating a policy response.

Speaking at the CII Financing 3.0 Summit, Nageswaran highlighted India's promising economic growth but drew attention to the record profitability of the Indian financial sector and the high levels of stock market capitalisation, which now stands at 140% of the GDP. He emphasized the need for a closer examination of this trend.

Reacting to his remarks, Congress official Jairam Ramesh acknowledged the importance of the CEA's role in public education and endorsed Nageswaran's concerns. Ramesh stressed the urgency for policies to mitigate the adverse effects of financialisation.

(With inputs from agencies.)