The Economic Survey 2024-25 has raised concerns about the elevated stock market valuations in India and their correlation with U.S. markets. It warns that a correction in U.S. markets could lead to a cascading effect in India, particularly impacting retail investors who have increased their participation since the COVID-19 pandemic. The survey highlights that these investors remain largely untested in prolonged downturns, which could negatively affect market sentiment. Additionally, it cautions against excessive financialisation, stating that it could harm the economy, especially for a low-middle-income country like India. The survey also acknowledges the role of the Securities and Exchange Board of India (SEBI) in moderating excesses in the capital market.