The Process of Financial Liberalization in India

At the core of the reforms programme initiated by the Indian Government in 1991 was the deregulation of the financial sector, perhaps the most controversial and difficult aspect of structural adjustment in developing countries. This book analyses the process of liberalization in the financial sector, with a detailed examination of the changes in each segment (banks and development finance institutions) and market (money, credit and capital) and hypothesizes possible paths that different constituents of the Indian financial sector may take in the future. It focuses on four specific issues in the reforms process: the regulatory regime pertaining to banks and development financial institutions; the interaction between financial and real sector reforms and the consequence of financial sector reforms on the financing of industry and agriculture; the link between the liberalization process and the general macroeconomic environment in which it occurs, and the implications of financial liberalization for the conduct of monetary policy. This timely book on an important component of the ongoing reforms process will interest students, researchers and teachers of economics, policy-makers, and anyone interested in the future of India’s economic reforms.