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
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: Suggested Citation