ROLE OF INSURANCE IN INDIAN FINANCIAL SYSTEM

Abstract

The financial system is the most powerful institutional and functional vehicle for economic transformation. Like other developing nations, India has also made enormous progress in different economic activities after getting independence and finally set up an efficient financial system. Here, finance plays the important role to effectively allocate and manage the national fund as well as identify the source of providing funds for developmental activities. In India, finance is broadly concerned with Public Finance and Business Finance. Public finance looks after the revenue and expenditure of public authorities like Government and business finance is concerned with the revenue and expenditure of private business enterprises. In the context of financial system, system stands for the means of managing financial activities to ensure considerable growth and development. In the term ‘financial system’, the word ‘system’ denotes a set of interrelated and interlinked financial institutions, financial markets, financial transactions, agents, instruments, regulators, claims and liabilities which interact with each other to achieve the goal of economic development through capital formation.