Survey warns excessive financialization can hurt India’s economy.

• Financialisation, a dominance of financial markets in shaping policy and macroeconomic outcomes, can harm the economy.

• In advanced economies, financialisation has led to unprecedented levels of public and private sector debt.

• Economic growth in such contexts becomes overly reliant on rising asset prices to offset leverage, exacerbating inequality and asset market considerations.

• The Economic Survey recommends India to balance financial sector development and growth with financialisation.

• The survey suggests working with the banking sector to bridge the capital requirement gap.

• Banks need to enhance their capabilities to meet the demands of new-age households and the digital economy while maintaining primary credit creation function.