Congress leader Jairam Ramesh took to X to highlight a statement from Uday Kotak, founder and director of Kotak Mahindra Bank, warning that excessive financialization could harm the Indian economy. He emphasized that many investors are pouring their savings into stocks without fully grasping the underlying valuations.
On Thursday, February 20, 2025, Congress emphasized the urgent need for stronger professional regulation of financial markets, advocating for a complete overhaul of SEBI. The party also called for an unwavering focus on building global manufacturing ecosystems within the technology sector, aiming to secure strategic niches for India on the world stage.
Congress General Secretary for Communications, Jairam Ramesh, shared a media report on X, quoting Uday Kotak, founder and director of Kotak Mahindra Bank, who cautioned that over-financialization could negatively impact the Indian economy. He warned that investors are putting their savings into equities without fully understanding valuations.
Ramesh further pointed out that India’s stock market capitalization now stands at around 140% of its GDP. He also referenced a warning from the Chief Economic Adviser in the Ministry of Finance on September 2, 2024, highlighting that the increasing profitability of the financial sector and soaring market capitalization demand more careful scrutiny.
Mr. Ramesh quoted the Chief Economic Adviser (CEA), who remarked, “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.”
The Congress leader then added, “Now, we hear a similar perspective from one of India’s most respected financial voices, Uday Kotak.”
Mr. Ramesh stated, “Kotak has warned that over-financialization could harm the Indian economy, as investors are moving their savings into equities without fully grasping the underlying valuations.”
He further emphasized, “We need stronger professional regulation of our financial markets. SEBI requires a complete overhaul.”
Mr. Ramesh also stressed, “There must be an unwavering focus on building global manufacturing ecosystems across the technology spectrum to secure niches for India. It’s not too late to act.”
