The case of financial reforms in India and emerging markets

How does India fare in terms of overall financial depth?

Over the years, the growth of Indian market has attained a high benchmark to sustain the business and competition with other nations. From the early 1990s, Indian economy has been following a liberalized policy, by reducing government restrictions on foreign trade and investment. After lumbering along at a pace of about 4–5% GDP growth a year in the last couple of decades, the economy has surged in this decade, posting an average annual growth of 8.5 percent since 2005.

However, one needs to look at how does India fare in terms of overall financial depth and the size of the financial system relative to the economy? It does not fare as well as compared to most other emerging markets at a similar stage of development. Despite the apparent strength of the banking system, the ratio of private sector credit to GDP is still low by international standards.

While India’s financial institutions and regulatory structures have been developing gradually, the time has come to make a more concerted push towards the next generation of financial reforms. Considering its greater integration with global trade and finance, does this call for deeper, more efficient and well-regulated financial markets? Does the situation demand financial inclusion reforms to pool in the savings of a humungous populace towards economic development? Will broadening and deepening of financial markets answer these questions?

The answers lie in the minds of the best minds in the domain. And what could be more interesting than having them discuss this on a common platform.

Come January 15th , catch this and much more at the “Future of Financial Markets” event in Goa.