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Fixing financial system key to high growth

The most pressing issue facing the financial sector is the rising stock of non-performing assets in the banking system

Isha Agarwal & Eswar Prasad

India has come a long way since it embarked upon its journey of economic reforms more than two decades ago. With a projected gross domestic product or GDP growth of over 7 per cent, it is now one of the fastest-growing major economies in the world. The high growth rate has been supported by a growing financial sector, in addition to continued efforts by the Narendra Modi government to push forward with structural reforms. However, the recent rise in financial sector vulnerabilities has added a dose of anxiety to an otherwise sunny outlook for India’s growth prospects. As the ...