Economic Institutions and Financial Advancement of India

Author Mandeep Kaur
Co-Author Amandeep Kaur
DOI

Country : India
Subject : Economics

Keywords : Economic Development, Financial Institutions, Liberalization

Abstract

Economic development is the primary objective of the majority of world nations. This truth is accepted almost without any controversy. Financial sector plays an indispensable role in the overall development of a country. The most important constituent of this sector is the financial institutions, which act as a conduit for the transfer of resources from net savers to net borrowers, that is, from those who spend less than their earnings to those who spend more than their earnings. The financial institutions have traditionally been the major source of long-term funds for the economy. These institutions provide a variety of financial products and services to fulfill the varied needs of the commercial sector, new enterprises, small and medium firms as well as to the industries established in backward areas. Thus, they have helped in reducing regional disparities by inducing widespread industrial development. The Government of India, in order to provide adequate supply of credit to various sectors of the economy, has evolved a well-developed structure of financial institutions in the country. These financial institutions can be broadly categorized into All India institutions and State level institutions, depending upon the geographical coverage of their operations. Financial Institutions plays a vital role in the development of developing countries because they can solve their problems of general poverty, unemployment, backwardness, low production, low productivity and low standard of living etc. by providing variety of financial instruments and securities. This paper covers the types of financial institutions pre and post Liberalization, their impact on industry, and opportunities for the country for the development.

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