Which is the Financial or Economic Capital of India? Of course, MUMBAI is called the financial capital of India. Why is it called so? Let’s find out answers to these interesting queries.
Mumbai: A Glimpse
The country’s powerhouse in its captivating beauty, engrossing lifestyle and the scintillating gushing seashores is what makes Mumbai an enticing city. Well, not to forget its ages-old art of making money, and of course money attracted innovations. And, did you know? Mumbai or former Bombay had the first Passenger train of India, the first 5-star hotel, and even the First Film directors!
Since the beginning of industrialization, the city of seven islands has been the headquarter of the major (business) sharks of the country from the East India Company to Larsen and Toubro, SBI, LIC, and Tata Group. And how we forget one of the most money-making industries of all time? Mumbai is the hub of the Bollywood industry, attracting thousands of migrants from all over the country.
Today, being the Financial, Commercial and Entertainment capital of India, Mumbai alone contributes to more than 5% of the total GDP and 25% of Industrial output. Inhabiting a population of around 12.5 million people, it is the second-most populous city of the country after Delhi.
But apart from that, there are many other reasons for Mumbai being the present-day Financial capital of India. Let’s have a look at them.
Why is Mumbai called the Financial Capital?
A quick answer, for so many decades Mumbai has been the hub for a plethora of financial services and businesses. It’s the home to various financial institutions and a leading center of trade and commerce.
The Stock Exchanges: BSE & NSE
All the national level trading that takes place, passes through the Bombay stock exchange (BSE) and National Stock Exchange (NSE), both of which are located in the Mumbai Metropolitan Region. Thousands of securities are traded every day from 9:15 am to 3:30 pm. The decades-old exchanges have witnessed every phase of the Indian stock market from the Bubonic Plague of 1896 to the 2008 Financial Crises and now, the recent Coronavirus pandemic of 2020.
Certain areas like Dalaal Street, Nariman Point, and the Bandra Kurla complex are the major financial centers of the city. Bombarded with headquarters of finance companies, banks, and corporate houses, You can well imagine what they would look like!
You may also like to explore Top 10 Largest Stock Exchanges in the World
Regulatory Bodies: RBI & SEBI
So along with being the epicenter of economic activities, Mumbai is also the land of the bodies overlooking the whole industry. The Reserve Bank of India monitors and controls the whole banking sector from printing notes to ensuring ethical operations. It also plays an important role in shaping government policies and strategies.
The Securities and Exchange Board of India or SEBI on the other hand is more specific to the regulations in the Securities and Commodity markets of India. Simply put, It overlooks all the financial intermediaries for the welfare of the investors. It is regarded as the watchdog of the finance sector.
Land of the Silver Screen: Bollywood
You might already know the humongous revenue generated by Bollywood movies. “The SRK movie crossed 100 crores in the first three days of its release!” or “Deepika Padukone movie gained tremendous success at the Box Office” are often the top headlines of the B-town news. Not just revenue earned but also the cost put into making the cars fly and the hero saving the city largely contributes to the economic development of the country.
The portmanteau Bollywood is known to arrive from the word “Bombay”. Well, now that it’s Mumbai, shouldn’t we call ‘Mollywood’? Just kidding!
Home to Major Industries
Until the 70s Mumbai owed its prosperity to the textile mills and seaports, but the economy has largely diversified since then. Present-day key industries include finance, gems and jewelry production, healthcare, and the ever-growing Information technology (IT) industry. Along with the conglomerates mentioned before, many of the fortune global 500 companies have originated from Mumbai making it the 6th global city in the world and one of the most expensive cities in India.
And naturally, with industries comes employment. It has a colossal amount of skilled and unskilled labour population and thousands new every year with hopes in the city of dreams.
Mumbai, not Delhi the Financial Capital: A Conclusion
It must’ve crossed your mind why Mumbai and not Delhi is the economic capital? after all, it is the capital and most populous city. Delhi too is the land of several industries and generates a huge amount of revenue through direct and indirect tax collection. Well, guess what? It did once surpass Mumbai to gain the title of Financial capital, back in 2016 according to an Oxford Economics report.
However, it soon regained it. One debate behind the idea of Delhi being the financial capital is because of its territorial status. The revenue earned from Delhi is utilized for the welfare of Delhi itself. However, revenue earned from Mumbai is used for the whole state of Maharashtra. This Delhi-Mumbai comparison war has been going on for a long time now.
Don’t miss to take a sneak peek into the Top 10 Fintech Companies
So what do you think? Should Delhi be the Financial Capital? Or is it Mumbai that should retain its position as the financial capital of India? Do share your valuable thoughts.