India's mcap-to-GDP ratio at 140%, we need more regulation of our financial markets: Congress' Jairam Ramesh

Congress leader Jairam Ramesh on February 20 said Indian financial markets "need more professional regulation" as the country's stock market capitalisation currently stands at approximately 140% of its GDP.

In a post on X platform (formerly Twitter), Ramesh cited Chief Economic Adviser as saying 'high levels of market capitalization require closer scrutiny' in September 2024.

"India's stock market capitalisation currently stands at approximately 140 percent of its GDP. On September 2nd, 2024, the Chief Economic Adviser in the Ministry of Finance had warned that the growing profitability of the financial sector and high levels of market capitalisation require closer scrutiny. "When the market becomes bigger than the economy, it is natural, but not necessarily reasonable, that the market’s considerations dominate public discourse and influence policy," he had said," posted Ramesh.

To further illustrate his point, Ramesh quoted Uday Kotak, founder and director, Kotak Mahindra Bank who expressed concern on excessive financialisation.