With Covid pandemic-induced lockdowns since last financial year having forced millions of people to remain confined in their homes, there has been increased retail participation in the stock market as many people have moved towards share market trading, according to an SBI Ecowrap report.
According to a study conducted by SBI, increasing retail participation, if it becomes the norm, could also enable a larger resource pool for financing India's infrastructural requirements.
"Another option for financing infrastructure that is also being explored is the Infrastructure Investment Trusts. Government-owned Financial Institutions like PFC, REC etc. are setting up InvITs and providing equity capital for new projects. These are all positive developments in the long-term financing story of India," said the report authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.
The report noted that with the onset of pandemic and subsequent lockdown, household financial savings had initially showed a significant jump in Q1 FY21, and then a sharp moderation in Q2 FY21. However, the data shows that currency in circulation again increased in Q3 and Q4 FY21. Within retail, maximum allocation has been to financials, followed by consumer staples, energy and IT, it noted.
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