Does Government Intervention in Credit Deployment Cause Inclusive Growth? An Evidence from Indian Banking

28 Pages Posted: 9 Aug 2012

Date Written: August 8, 2012

Abstract

Access to finance by the poor is a sine qua non for poverty reduction through economic development thereby driving inclusive growth which can further lead to sustainable growth. This study using adequate data covering pre and post-liberalisation period from 1974-75 to 2007-08 in the Indian context and employing Multiple Regression (OLS) Analysis has established that there is a strong need to strengthen policy approach for financing the priority sector as it has had a positive impact towards attaining inclusive growth. In view of the strong relationship between priority sector lending and inclusive growth, it is imperative on the policy makers in general and the governments in particular to make efforts to induce the banks and financial institutions in accelerating priority sector lending beyond the stipulations laid down.

Keywords: Financial Markets and Macro economy, Credit, Government Policy and Regulation, Economic Development, Institutions and Growth

JEL Classification: E44, E51, G28, O16, O43, O53

Suggested Citation

P.M., Vighneswara Swamy, Does Government Intervention in Credit Deployment Cause Inclusive Growth? An Evidence from Indian Banking (August 8, 2012). Available at SSRN: https://ssrn.com/abstract=2126807 or http://dx.doi.org/10.2139/ssrn.2126807

Vighneswara Swamy P.M. (Contact Author)

IBS-Hyderabad ( email )

62, Nagarjuna Hill
Panjagutta
Hyderabad, TX AP 501504
India

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