Need to reconsider sachetisation of F&O trade to safeguard household savings: CEA
household savings getting invested in futures and options trade, Chief Economic Advisor V Anantha Nageswaran on Saturday said there is a need to reconsider sachetisation of F&O trade because it requires different financial literacy. Speaking at the CII's Annual Business Summit, 2024, Nageswaran said whenever financial sector development precedes national development the story hasn't ended well for other countries as well.
«Asian crisis 1997-98 is a very important example,» he said.
«When we take pride in the fact that we have the world's largest trading volume in futures and options (F&O), we need to ask ourselves is that a sign of progress or a sign of concern,» the CEA said.
He said the financial sector has a responsibility to ensure that capital market grows in those areas where we can actually harness Indian household savings for productive purposes.
«Many of the people currently engaged in the market do not understand them… The sachetisation of futures and options is something that we need to reconsider because financial literacy that is required for trading stocks is very different for trading futures and options,» Nageswaran said.
Sachetisation refers to process of making financial products and services available in smaller, more manageable packets.
As per government data, the net household savings declined sharply by Rs 9 lakh crore in three years to Rs 14.16 lakh crore at the end of 2022-23 fiscal.
The data showed that the investment in mutual funds almost trebled to Rs 1.79 lakh crore in 2022-23 in
