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

Vighneswara Swamy

MPRA Paper from University Library of Munich, Germany

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 postliberalisation 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 (search for similar items in EconPapers)
JEL-codes: E44 E51 G28 O16 O43 O53 (search for similar items in EconPapers)
Date: 2011
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