The Financial sector is in process of rapid transformation. However the Indian financial system remained a relatively free but unsophisticated market upto the seventies. More changes came in with the nationalisation of financial service providers. The main target of the nationalisation drive was the banking sector. Post liberalization rapid growth, intensive investment by both Indian nationals and foreigners, stabilization along with convertibility of the rupee and rapid progress in employment have been noticed. All sectors like banks, capital market, insurance and venture capital have witnessed a rapid growth in recent years. However people living in rural parts of the country still don’t have adequate access to the mainstream financial products such as bank accounts, low cost loans, etc....
The Ministry of Finance is responsible for administration of finances of the Government. It is concerned with all economic & financial matters, affecting the country as a whole including mobilization of resources for development and other purposes. It regulates expenditure of the Government including transfer of resources to the states. The Ministry comprises of following four departments:
- Department of Economic Affairs
- Department of Revenue
- Department of Expenditure
- Department of Disinvestment
Finance Department largely performs the function of advising the Government on all fiancial matters. The formulation of the Budget is one of its most important functions.