Introduction
The development strategies of India in the post Independence period 1950-1990, were implemented with a view to having high levels of growth, high public savings and self-reliance. The central and the leading role for industrialization were assigned to the State. The primary emphasis was on increasing the domestic savings rate by suppressing consumption, high taxation, and appropriating income through ownership of commercial enterprises. The role of the financial system was also limited to providing incentives for savings and capital accumulation as interest rates were controlled. The actual results fell far below the expectations. India showed one of the lowest rates of growth in the developing world with rising public deficits and periodic balance of payment crises. In the period between 1950 and 1990, India's growth averaged less than 5% per annum, and per capita income growth was less than 2% per annum. This period showed a growth rate of 5.2% per annum in the developing world, including the Sub-Saharan Africa and the least developed countries (Jalan, in Kapila, 2002).
