| Summary: | The financial sector in India-banking, capital markets, insurance, mutual funds etc.,has changed since the reforms India under took in nineties. Although many improvements have been effected, this paper will argue that the scope of many of these changes has been relatively narrow and predominantly mechanistic.
Closer inspection of India's flourishing stock markets, fast-growing mutual funds and capable private banks reveal that tight government control over almost every other part of the financial system of the country undermines India's overall economic performance.
An integrated program of further reforms that improves allocation of capital, captures more savings, and reduces the operating inefficiencies of the financial system, will unlock the performance of the sector to boost India's economy to another level of growth, lifting earning power of millions of India's households.
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