Indian Economy: Financial Sector Reforms and Development
Prof. Ravinder Rena
University of the Western Cape; Polytechnic of Namibia; Papua New Guinea University of Technology
March 12, 2009
International Journal of Business and Emerging Markets, Vol. 1, No. 4, pp. 387-404, 2009
Indian economy has been recording impressive growth rates since 1991. This can be partly attributed to the multi-sector structural reforms aimed at enhancing productivity, efficiency and international competitiveness of the economy. The reforms in the financial sector have been most effective. The main thrust of the financial sector reforms has been the creation of efficient and stable financial institutions and development of the markets, especially the money and government securities market. In addition, fiscal correction was undertaken and reforms in the banking and external sector were also initiated. The reforms have been undertaken gradually with mutual consent and wider debate amongst the participants and in a sequential pattern that is reinforcing to the overall economy. The financial markets have developed and are more integrated after the reforms, and regulatory and supervisory institutions have been set-up. The reforms, though slow paced initially but well synchronized, have begun to yield results. The economy has recorded consistently high growth rates, built substantial foreign exchange reserves, pre-paid some of its external debt and restructured its domestic debt. This article covers the developments in banking, external sector and financial markets.
Keywords: Indian economy, Capital market, Foreign exchange reserves, Economic growth, banking sector reforms
JEL Classification: G21, G28, N21, O12, O16Accepted Paper Series
Date posted: March 12, 2009
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