ABSTRACT

The current study sheds important light on a range of issues in India’s emerging financial markets: the way in which different sectors of the economy choose their portfolios; how credit rationing and financial liberalisation affect operations and performance of the country’s financial sector; how interest rates are determined and affect different sectors of the economy and how credit is distributed to those sectors most in need of economic development. This book is a first step towards a fuller analysis directed at the ways in which policy instruments affect an economy as a whole, as well as for future development of this kind of study for developing economies. In Section 11.1 a summary and the key findings and in Section 11.2 the key

policy implications drawn from the empirical analysis are spelled out. The limitations in conducting this project are explained by outlining further promising research ideas in Section 11.3.