The Economic Survey 2021, tabled in Parliament by Finance Minister Nirmala Sitharaman on January 29 commented on the stock market rally that led market capitalisation to GDP ratio crossing the 100 percent-mark for the first time since October 2010. India's Net FPI inflows were at an all-time monthly high of $9.8 billion in November 2020.

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During April-December 2020, the country witnessed an inflow of $30 billion -- five times its previous year's value. As a result of these inflows, the Sensex and Nifty buoyed, reaching record highs of 49,792 and 14,644.7 respectively, as of January 20.

"While the stock market value the potential growth, these elevated levels still raise concerns on the disconnect between the financial markets and real sectors," the survey read.

The market underwent some significant corrections due to COVID-19 induced uncertainty at the beginning of this fiscal, but benchmark indices recovered quickly after that. From 29,468 points as of March 31, 2020, the Sensex has risen 68.9 percent to 49,792.1 as of January 20, 2021. During the same period, the Nifty gained 70.3 percent.

India was the only emerging economy to receive equity inflows in 2020 as the coronavirus outbreak spooked global markets. India remained a preferred investment destination in FY20-21 as the global asset shift towards equities quickened; and quicker recovery prospects in emerging markets became apparent.

Also read: LIVE updates from the 2021 Economic Survey

First Published:Jan 29, 2021 4:06 PM IST