India's chief economic advisor thinks the sharp rise in futures and options by retail investors isn't a systemic concern yet.
"Whether the situation in retail participation in F&O has gotten out of hand? I don't think so," Dr. Anantha Nageswaran told NDTV Profit in an interview. "It is not a systemic concern and we don't want it to become a systemic concern," he said, adding that it is in the interest of retail investors and capital markets that financial savings are channelled into productive investments.
Nageswaran also said that while Indian markets aren't "necessarily overheated," conditions are appropriate for profit-booking. Any corrections in developed markets will have implications in Indian markets, he cautioned.
The Economic Survey, published on Monday, cautioned that a significant increase in retail investors in the stock market calls for careful consideration. "This is crucial because the possibility of overconfidence leading to speculation and the expectation of even greater returns, which might not align with the real market conditions, is a serious concern," the survey said.
Nageswaran said if the south-west monsoon turns out to be patchy and uneven, there will be implications for rural growth. India's real gross domestic product growth is estimated at 6.5–7% for FY25, according to the survey.
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