World Bank Highlights Financial Sector Reforms
The World Bank has said that India needs further reforms in its financial sector to attain the goal of a $30 trillion or about ₹2,640 lakh crore economy by 2047. According to the report, more mobilization of capital through the private sector is needed to achieve such a target.
The Financial Sector Assessment report of the World Bank finds that India's digital public infrastructure and the many government programs have resulted in an unprecedented increase in access to financial services for both men and women. However, the report also suggests some additional steps needed to be taken for the expansion of account usage-particularly among women-and making available a wide range of financial products for individuals and MSMEs.
About the Financial Sector Assessment Program (FSAP)
The FSAP is a joint program between the International Monetary Fund (IMF) and the World Bank that offers a comprehensive analysis of members' financial systems. For countries with significant and systemically important financial sectors, FSAPs became mandatory in September 2010.
Presently, the program is carried out every five years in 32 countries, including India, and every ten years in 15 other countries. Under FSAP, the IMF prepares a Financial System Stability Assessment (FSSA) report and the World Bank issues a Financial Sector Assessment (FSA) report.
India’s Participation in FSAP and Recent Findings
The last FSAP for India was conducted in 2017, when both the IMF and World Bank released their respective reports. India's Finance Ministry welcomed the recent financial sector assessment carried out by the IMF-World Bank team and acknowledged its constructive role in supporting the financial stability and growth of the country.
Progress and Strength of Financial Sector in India
According to the latest FSA report from the World Bank, since 2017, India's economy has become resilient, diversified, and broad-based. Financial sector reforms are found to be playing an important role in aiding the country in its recovery from challenges it faced in 2010 and during the COVID-19 pandemic. It also highlighted that India’s capital markets have grown from 144% of GDP in 2017 to 175% today. This progress reflects the strength of financial market infrastructure in India and the presence of a diverse investor base.
Tags Cloud
