Thursday, February 04, 2010

Lumbering out of policy inertia on India's Financial sector

ARVIND SUBRAMANIAN, fellow at the Peterson Institute for International Economics recommends greater interaction between the government and the Reserve Bank of India on strategic and long-term issues such as the liberalization of the financial sector and that of the capital account. In an op-ed in The Business Standard, "What Globalization Strategy for India?", he states that a combination of factors such as greater availability of foreign capital seeking higher returns in India and a domestic political economy that favored foreign capital would ensure that India moved to a model based on reliance to foreign capital by default and this called for a jolt out of policy inertia and a greater co-ordination between the key stakeholders on strategic issues.

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