3 ), 537 - 558. 11 huang, h. and lin, s. ( 2009 ). non ‐ linear finance – growth nexus. the economics of transition 17 ( 3 ), 439 - 466. 12 levine, r., ( 2004 ). finance and growth : theory and evidence, nber working paper no. 10766 ; romer, p. m., ( 1990 ). endogenous technological change, journal of political economy, 98 ( 5, part 2 ), s71 - s102. widespread sell - off and a global unwinding of carry trade. analogously, the global inflation surge in the wake of the war in ukraine provoked a synchronised and aggressive tightening of monetary policy and financial conditions, resulting in bank failures and deposit runs in some jurisdictions in march 2023. iv. situating finance in national accounting in the circular flow of income and expenditure that describes the working of an economy, transactions in goods, services, compensations and taxes are matched by flows of saving and investment, which represent inter - sectoral transfers of lendable resources. in india, the household sector typically generates surplus saving relative to its investment which it lends to other sectors. recently, net financial saving of households has almost halved from its level in 2020 - 21 due to behavioural changes underway in the form of unwinding of prudential savings accumulated during the pandemic as well as shifts from financial assets to physical assets such as housing. going forward, boosted by rising incomes, households will likely build back their financial assets – 15 per cent of gdp was observed during the early 2000s up to the global financial crisis. this process has already begun – households ’ financial assets have increased from 10. 6 per cent of gdp during 2011 - 17 to 11. 5 per cent during 2017 - 23 ( excluding the pandemic year ). their physical savings have also risen in the postpandemic years to over 12 per cent of gdp and could rise further – they had reached 16 per cent of gdp in 2010 - 11. accordingly, households will remain the top net lenders to the rest of the economy in the coming decades. the private corporate sector has drastically reduced its net borrowings from the rest of the economy 13, reflecting a combination of rising internal accruals and subdued capacity creation. looking ahead, its net borrowing requirement is likely to rise on the back of a revival in the capex cycle. these financing

. from debt and equity issuances in the domestic capital markets to external commercial borrowings and foreign direct investment ( fdi ). vi. micro small and medium enterprises micro, small, and medium enterprises ( msmes ) are crucial to india ’ s economic and social progress – it is estimated that the msme sector accounts for around 30 per cent of india ’ s gdp, 45 per cent of exports and 62 per cent of employment in the business sector. 19 msmes are expected to grow in number in the coming years. the overall finance demand of india ’ s msmes is around us $ 1, 955 billion. of this, the demand for debt - based finance is pegged at us $ 1, 544 billion, 20 with half coming from those that prefer financing from informal sources or from financially unviable enterprises. this leaves a debt demand of us $ 819 billion, of which us $ 289 billion demand is currently fulfilled by formal credit lenders like banks. the remaining unfulfilled demand of us $ 530 billion makes up a huge addressable market for banks, fintechs and nbfcs. vii. skilling scaling up for the future will require a multi - faceted approach, prominently involving skilling human resources in line with the acceleration in technological transformation. according to the world government of india, annual survey of unincorporated sector enterprises ( asuse ), 2022 - 23 ; pib, 2023, contribution of msmes to the country's gdp, ministry of micro, small & medium enterprises. december 11 ; mckinsey global institute, 2024, a microscope on small businesses : the productivity opportunity by country, may. 20 avendus, 2023, msme lending : unlocking potential, realising dreams, april. economic forum, 44 per cent of workers ’ skills globally would be disrupted in the following five years 21. to skill the workforce of the future effectively, india needs to invest nearly ₹2 - 3 lakh crore per annum over the next 6 years. 22 this would include infrastructure, training centres and partnerships with private sectors. financing skilling requirements could combine performance - based investment instruments such as bonds intended to finance development programmes with a pre - agreed social outcome ; redeemable skill vouchers enhancing chances of wage employment ; private equity / venture capital funding for tech - based training platforms, e - learning start - ups and the like ; direct support from multilateral agencies, social and private foundations in the form of