Balancing Viksit Bharat: Guarding Against Financialisation

The Economic Survey 2024-25 advises India to caution against financialisation, or excessive market influence on policy, to achieve Viksit Bharat by 2047. It warns of asset price bubbles and increased inequality. Balancing financial sector growth with financialisation is crucial for economic stability.

The Economic Survey 2024-25 has warned that India must guard against financialisation, a phenomenon where financial markets have undue influence over policy and macroeconomic outcomes, as the country aims for Viksit Bharat by 2047.

Drawing from the experiences of advanced economies, the survey warns of potential risks including asset price bubbles and unmanageable levels of debt. It stresses the need for regulatory measures to mitigate excessive speculation and stabilize the system, thus serving as welfare measures.

While recognizing the robust performance of India's capital markets, the survey underscores the necessity for aligning financial sector incentives with national growth ambitions. The rise of consumer credit and non-bank financing, along with the strong showing of equity-based financing, indicates dynamic changes in the financial landscape.