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This article draws a parallel between physical infrastructure and the financial system, and discusses why both are necessary to drive growth. It discusses how a robust financial system enables inclusive growth, and discusses two different approaches to financial sector reform - the ones taken by the Percy Mistry report and the Raghuram Rajan report.

The article was first published in the June 2008 issue of Pragati (PDF, 1.7 MB).

The edited and unedited versions of this article are attached here. The unedited version is much longer but also more comprehensive. I recommend the unedited version for readers who are not familiar with the basic concepts of finance.