Are non-financial firms' financial investments here to stay, or at risk?

There are two ways of looking at this problem - first, has the composition of reported income changed? And second, has the composition of assets changed?

The aggregate corporate data, as reflected in the income tax returns, captures a systematic shift in the composition of income of this segment of the economy — away from business income and in favour of passive incomes, i.e., capital gains and other incomes.

 

To understand this trend a little more, this column uses data from the BSE 500 companies to explore any observable trends. While these companies do not represent the average enterprise in the country, they account for a large share of the value added in corporate India and, therefore, are likely to drive these trends.

 

There are two