Instead of looking at big-bang financial sector reforms, the Raghuram Rajan panel has advised the government to implement easily achievable smaller measures like trading of warehouse receipts and trade receivables to help foster growth in the country. The report has also called for rewriting archaic financial sector regulations to make them growth-friendly.

'There has been an enormous amount of attention paid to issues like capital account convertibility, bank privatisation and bank priority sector norms. There are many other areas where reforms are less controversial, but perhaps as important,' the report of the high-level Committee on Financial Sector Reforms headed by Raghuram Rajan, a professor at Graduate School of Business, University of Chicago, said. The final draft of the report was submitted to the government recently.

The panel has said that even if 15-20 per cent of the annual agricultural produce were to be stored in warehouses, it had the potential to generate over $ 30 billion, low-cost agricultural credit to farmers. The Warehousing (Development and Regulation) Act, 2008, was enacted recently. 'This is an example of how forward-looking regulation can help build the credit infrastructure and enhance the availability of finance,' the report added.

It has also said credit to small and medium enterprises could be boosted immensely if the trade receivable claims that they have on large firms could be converted to an electronic format and sold as a commercial paper. 'Mexico has a central agency facilitating this process, there is no reason why we could not create an environment where some institution like the National Securities Depository could do this,' it added.

While recommending a number of financial sector reforms, the panel said this is a difficult time for such measures on the backdrop of the near meltdown of the American financial sector.