With operating frequencies approaching the gigahertz range, inductance is becoming an increasingly important consideration in the design and analysis of on-chip interconnect. We present an accurate technique for modeling and analyzing the effects of parasitic inductance on power grid noise, signal delay and crosstalk. We propose a detailed circuit model composed of interconnect resistance, inductance and distributed capacitance, device decoupling capacitances, quiescent activity in the grid, pad locations, and pad/package inductance which accurately determines current distribution and, hence, on-chip inductive effects, and proves superior to the traditional simplified loop inductance approach. The model uses partial inductances, computed using an analytical formula for a pair of parallel rectangular conductors spaced in any relative position. We present experimental results, obtained from simulations of industrial circuits, that show the importance of various model components while analyzing on-chip inductance. We also propose a simple sparsification technique to handle large, dense partial inductance matrices.