Financialisation

The increasing dominance of financial motives, financial actors, financial markets, and financial institutions in the operation of domestic and international economies, often at the expense of the real (productive) economy. Financialisation describes the structural shift in which non-financial corporations prioritise shareholder value maximisation and financial engineering over long-term capital investment, leading to short-termism, rising inequality, and wage suppression. In the Indian context, concerns about financialisation focus on household savings migrating from bank deposits to equity and derivatives markets, the growing share of financial-sector profits in GDP, and the implications for credit allocation to productive sectors like MSME manufacturing.