Policy Briefs & Reports

The Centre for Policy Research (CPR), Delhi in collaboration with the BSE Ltd., Mumbai have started a monthly Macro Economic Seminar Series. The objective of these Seminars is to generate fresh analytical insights into the Indian macroeconomic issues for potential use by policy makers. The unique format of these seminars is to bring together macroeconomists who have different perspectives on the state of the macro economy, depending upon their location in think tanks, financial institutions and corporate organisations. The Second seminar of the series was held at CPR, Delhi on 30th November. The topic of the seminar was ‘Channelling household savings to productive uses through the capital markets’. A panel discussion between Ajit Ranade, K P Krishnan and Praveen Chakravarty was moderated by Partha Mukhopadhyay. Household (HH) savings hascontinued to account for the bulk of gross domestic savings over the years. Recent trend shows that share of HH savings into physical assets is rising as compared to that in financial assets. Interestingly, in the decade 2004 to 2014, India has imported $176bn of gold (including re-export) which is higher than $130bn of FII inflows. This has raised questions on why Capital market has not been able to attract HH savings to spur economic growth. Moreover, in spite of increase in number of listed companies and market capitalisation, capital raised through IPO is less than 1 percent of GDP in India and even falling. So, it is necessary to look into how savings can be intermediated through capital market into capital formation.