Stronger financial regulations needed; SEBI requires overhaul: Congress

New Delhi

The Congress on Thursday emphasized the need for stronger regulation of financial markets and called for a complete overhaul of SEBI. The party also stressed the importance of developing global manufacturing ecosystems to secure India's position in advanced technology sectors.

Ramesh echoed these concerns, citing the Chief Economic Adviser’s (CEA) recent statement that India's stock market capitalization is about 140% of its GDP. The CEA had cautioned that rising financial sector profitability and high market capitalization need careful monitoring.

Ramesh pointed out that when markets grow larger than the economy, they often shape public discourse and policy decisions in ways that may not always be reasonable. He emphasized that Kotak’s warning aligns with expert concerns about unchecked financial expansion.

To address these risks, Ramesh called for more professional regulation of financial markets and a comprehensive restructuring of SEBI. He also urged policymakers to prioritize global manufacturing growth, ensuring India carves a niche in key technology sectors. According to him, it is not too late for India to shift focus and strengthen its economic foundation.

Congress leader Jairam Ramesh shared a media report on X quoting Kotak Mahindra Bank founder Uday Kotak, warning that over-financialisation may harm India's economy as investors shift savings into equities blindly.