New Sources of Dynamism in the Industry

Bandi Ram Prasad places the canvas of Indian industry in relation to the financial sector. Reforms gave much needed impetus to industries with opportunities to pursue growth, diversification and global expansion even as policy support, changing dynamics of global manufacturing, and financial reforms emerged as new sources of dynamism. The rapid expansion of India’s financial sector in terms of reach of institutions, products, domestic and foreign financial flows have had significant impact on financing of the Indian industry- from the corporate sector in the conventional economy to the new infrastructure projects to the start-ups, though concerns continue to exist in terms of inadequate financial flows to small businesses and SMEs that have greater potential for employment generation in the context of bank NPAs. The focus on finance raises interesting issues such as risks from volatilities arising from global geopolitics and the scope for domestic policy to evolve alternatives to ensure sustained financial flows to industry.