Financial structure and economic growth in India

Financial structure mainly deals with the presence of financial markets and institution in the financial system. Many economists consider that institutions are the key driver of economic growth, whereas others identify the role of financial markets. The present study first investigates the pattern of financial structure in India for different periods. An attempt is also made to empirically investigate the relative role of financial markets and institutions in determining economic growth of India. It is found that institutions had relatively dominated the financial system in India in early 1990s. However, in recent years, financial system has shown inclination towards financial markets in relation to institutions.