Asset Under Management Of Mutual Funds Correlation With India's Economic Output.

Abstract

This research delves into the intricate web connecting mutual funds and the Indian economy. It dissects the multifaceted impact of mutual funds, exploring how they mobilize savings, fuel capital market growth, and promote financial inclusion. The paper further strengthens its analysis by incorporating insights from existing academic research on the topic. To quantify the potential link between these financial vehicles and India's economic growth (measured by Gross Domestic Product or GDP), the study proposes a linear regression analysis as the methodological cornerstone. This statistical technique allows researchers to estimate the influence of specific aspects of mutual funds on GDP. For instance, the analysis might examine how the total Asset Under Management (AUM) of mutual funds correlates with India's economic output. It's crucial to acknowledge the limitations of this approach. While regression analysis can identify correlations, it cannot definitively establish causation. Just because mutual fund growth appears to coincide with higher GDP doesn't necessarily mean one causes the other. Additionally, the chosen independent variables might not capture the entire picture. Other factors, like foreign investment or government policies, could also be influencing GDP alongside mutual funds. Therefore, the results of the regression analysis are interpreted with caution. They serve as a springboard for further investigation, highlighting the potential for a more intricate relationship between these financial instruments and the Indian economy.