India’s Financial System: Building the Foundation for Strong and Sustainable Growth

Books, July 6, 2023

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India’s Financial System: Building the Foundation for Strong and Sustainable Growth

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Bibliographic details

• Published: July 6, 2023
• Series: Books
• DOI: https://doi.org/10.5089/9798400223525.071

Economic performance and scale

• Real GDP growth averaged about 6.6 percent during 1991–2019.
• Population: 1.4 billion.
• Share of world economic output (PPP terms): about 7 percent.
• Ranking: India is the third largest economy—after the US and China.
• Pages: 292
• DOI: https://doi.org/10.5089/9798400223525.071
• ISBN: 9798400223525

Historical shocks and vulnerabilities

• External shocks noted:
  • Asian financial crisis (1997)
  • Global financial crisis (2008)
  • COVID-19 pandemic (from 2020)
  • War in Ukraine (2022)
• Domestic shocks have also impacted the economy.
• The book highlights that some shocks were directly related to the financial sector.

Financial sector role in supporting growth

• The book analyzes linkages between the financial sector and growth.
• Emphasis on strengthening the financial system to support growth and reduce vulnerabilities.
• Focus areas include:
  • Improvements in bank lending to foster productivity.
  • Measures to further develop India’s corporate bond market.
  • How the financial system can help to address climate issues.

Financial inclusion and digitalization

• The book reflects on India’s success in leveraging digitalization to foster financial inclusion.
• Digitalization is presented as a key mechanism for broadening access to financial services.

Policy implications and recommended actions (high level)

• Elicit policy actions that could help the financial sector better support India’s growth potential, including:
  • Strengthening bank lending practices to boost productivity.
  • Developing the corporate bond market to provide alternative financing sources.
  • Leveraging digitalization to deepen financial inclusion.
  • Integrating climate considerations into financial system policies.

Subject coverage and keywords

• Subjects: Bank credit, Central banks, Climate finance, Credit, Environment, Financial crises, Financial inclusion, Financial markets, Financial sector policy and analysis, Money, Solvency
• Keywords include: Asia and Pacific, bank capitalization, Bank credit, banking, Climate finance, corporate bond bond market, corporate bond markets, Credit, credit growth, Europe, financial inclusion, Global, green finance, Growth and financial system, macro-financial linkages, monetary policy communication, private sector bank, PSB dependence, resolution frameworks, Solvency, South Asia, volatile capital flows

India’s Financial System: Building the Foundation for Strong and Sustainable Growth — https://www.imf.org/en/publications/books/issues/2023/07/06/indias-financial-system-building-the-foundation-for-strong-and-sustainable-growth-523790