ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

FinanceSubscribe to Finance

Financial Inclusion through Urban Cooperative Banks

This study gives insights into the financial inclusion and fintech performance of Telangana urban cooperative banks, based on a primary survey carried out among UCB officials. More than 60% of the UCBs are found to cater to slum dwellers and micro, small and medium enterprises. But a clear gender gap is evident in terms of account ownership and access to credit.

 

Tax Reforms and Global Redistribution

The current international financial system needs an urgent overhaul as it continues to undermine workers’ rights. The recent agreement on the “Two-Pillar Approach” that aims to tackle global corporate tax avoidance and taxing the digital economy falls short of addressing the priorities of the global South, and threatens their sovereignty.

Evolving Contours of Monetary Policy

Monetary policy has emerged as an important tool of economic policy both in developed and developing economies. The monetary and financial system is far more complex today than it has been in the past. Financial intermediation has reached a high level of sophistication, which has itself become a source of concern. The impact of monetary policy action can be transmitted through a variety of channels, some of which though recognised in the past, have become more important. While the traditional issues such as the objectives of monetary policy and the possible trade-off among them remain relevant, they need to be related to the far-reaching changes in the institutional environment at home and abroad. The changing objectives of monetary policy, newly evolving instruments of monetary control and the transmission mechanism and issues related to autonomy in the pursuit of monetary policy are examined.

 

Financial Fragility in ‘Mature’ Markets

With rising non-financial corporate debt and evidence of elevated borrowing levels among non-bank financial companies, the fragility resulting from excess leverage has returned to haunt developed country financial markets.

Money or Medium?

Women’s empowerment in the informal economy is mainly understood through a solution-based approach: improving access to finance or giving informal women workers avenues to express and acquire their political voice. Yet, little consideration is given to the root cause of their precarity, which, in the end, disempowers the very tools that can secure women’s rights in the informal economy.

 

Will COVID-19 Change the Landscape of Financing Innovation in India?

The COVID-19 pandemic may affect the financing opportunities for innovation. The revenue loss induced by the pandemic is likely to divert the existing resources in aiding firm survival and economic recovery, with financing innovation taking the back seat. Highlighting the current state of innovation in the country, the rise of the country in its innovation ranking and its existing sources of funding is brought to the forefront. Various avenues presently exist for this purpose and more outlets could be explored to boost the funds for innovative efforts. Experience and policies of other emerging economies can help devise suitable measures that could further enhance India’s trajectory up the innovation ranking.

Fiscal Federalism and Regional Inequality in India

In all federal structures, the composing units are not self-sufficient financially. But, in India, the economic dependence of states on the centre is rather high because of widespread disparities in their levels of economic development. The federal transfers to the states through the Finance Commission, Planning Commission and centrally-sponsored schemes are investigated. The role of the union government in equitable direct investment, subsidy, and private investment policy for unbiased regional development is also underlined . The data proves that although the Finance Commission’s transfers are progressive, the share of devolution for low-income states is gradually decreasing. Unfortunately, all other transfers and efforts by the centre are regressive to address the regional inequality issues.

Can Jan Dhan Yojana Achieve Financial Inclusion?

While there has been a tremendous increase in the number of bank accounts opened, the data show that the average balance in these accounts is low and a significant proportion of the accounts are inoperative. Although there was a rise in the average deposits during demonetisation, they later settled at a lower level. Further, financial inclusion means not just the opening of bank accounts but, more importantly, access to credit from formal sources. The limited data available in this regard show that after the Pradhan Mantri Jan Dhan Yojana was launched there has not been any increase in the credit–deposit ratio and the share of small loans has continued to decline. Very few people have benefited from the overdraft facility that is supposed to be provided by the accounts under the scheme. Issues of access to banking in rural areas remain.

Deciphering Financial Literacy in India

Utilising a nationally representative data set, an index of financial literacy consisting of financial knowledge, behaviour, and attitude is constructed. The findings suggest significant variation in financial literacy across states with an over 60 percentage point difference between the state with the highest financial literacy and that with the lowest. Multivariate regressions show that there exist large and statistically significant gender-, location-, employment-, education-, technology-, and debt-driven differences in financial literacy. Much of the observed regional divergence persists even after we control for cohort effects.

Long-run Determinants of Sovereign Bond Yields

Keynes’s supposition of short-term interest rates as the key driver of long-term government bond yields is investigated for India, after controlling for various key economic factors. It is seen that long-term interest rates of Indian government bonds are positively associated with the short-term interest rates of Treasury Bills. Higher long-term interest rates on IGBs are influenced by higher short-term interest rates, higher rates of inflation, a faster pace of industrial production and higher fiscal deficit (and vice versa). The bond market was disrupted during 2013 when yields rose sharply in India. Incorporating this structural break improved our findings.

Pages

Back to Top