World Bank report
The new World Bank report says that if India has to become a $30 trillion economy by 2047, then the pace of reforms in the financial sector will have to be increased. Besides, it is also necessary to strengthen the options for private investment and capital raising. This report, named Finance Sector Assessment (FSA), believes that India’s digital public infrastructure and government schemes have proven to be extremely effective in increasing access to financial services, especially for both men and women.
It has also been suggested in the report that women should be motivated to use banking services as much as possible. Apart from this, emphasis has also been laid on providing easy access to various financial products to common customers and MSMEs i.e. small and medium businessmen.
India’s financial system is strong
The report on the capital market looked quite positive. According to the World Bank, since 2017, India’s financial system has become stronger, diverse and more inclusive. Thanks to reforms, the country made good progress in emerging from the challenges of the 2010s and the shock of Covid-19. The Finance Ministry has also welcomed this assessment done by the joint team of IMF and World Bank.
Talking about the capital market, there has been a huge expansion in it as compared to the previous FSAP. The size of the capital market, including equity, government bonds and corporate bonds, has increased from 144 percent to about 175 percent of GDP. The strength of market infrastructure and increasing diversified base of investors are considered to be the major reasons for this growth.
The Financial Sector Assessment Program (FSAP) is a joint initiative of the IMF and the World Bank, under which an in-depth review of a country’s financial sector is conducted to assess its strength, risks and future needs.