Macroeconomic Indicators and Capital Market Dynamics: A Critical Analysis of India’s Economic Growth and Stability

Abstract

The Indian economy is shaped by various macroeconomic indicators including inflation, interest rates, exchange rates, and capital market performance. This study investigates the impact of these indicators on the Indian rupee and economic stability. It examines the relationship between capital markets and GDP growth, analysing how stock market fluctuations influence economic expansion. Additionally, the study evaluates the effects of rupee devaluation on financial indicators from 1970 to 2024, highlighting its implications on trade, inflation, and foreign exchange reserves. Another key aspect explored is household savings patterns and their role in capital formation, which is essential for long-term economic growth. Using a quantitative research methodology, the study employs statistical tools such as regression analysis and time-series modeling to examine historical data from government sources, financial institutions, and market reports. The analysis provides insights into how macroeconomic factors interact with currency stability and capital markets, offering a comprehensive view of India’s financial landscape. The findings of this research contribute to a deeper understanding of the economic forces affecting the Indian rupee and GDP growth. The study also presents policy recommendations to enhance financial resilience, promote sustainable growth, and strengthen India’s position in the global economic environment.