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

Bipin K DeokarSubscribe to Bipin K Deokar

Financial Inclusion

The prime minister's mission on financial inclusion for all by 2018 is not a new programme, there have been variants initiated by the Reserve Bank of India and there was another proposal of the Ministry of Finance as well. The new programme as it stands has few details and does not seem to recognise the enormity of the infrastructural and human resource challenges that must be overcome and the scaling up expected of the banking sector. There also seems to be a lack of coordination between the RBI and the Government of India.

Growth in Indian Agriculture

Indian agriculture has been doing far better in the years since 2004-05. This note explores available data to understand why this has been so. It is found that after 2004-05, public investment in agriculture increased, the National Horticulture Mission was launched, and more agricultural credit was made available that spurred private investment in agriculture as well. These policy initiatives resulted in increased yields and higher agricultural growth.

Reverberations of the US Fed's Taper o n Currency and Stock Markets

The US Federal Reserve's March 2014 decision to continue with tapering off of its asset purchases indicates that this may continue until the end of 2015. The effects of the gradual winding down of the quantitative easing programme in the developing economies are discussed here.

Bank and External Borrowings of the Corporate Sector

Large Indian corporate firms went on a borrowing spree abroad a few years ago attracted by the lower interests that came on external commercial loans. But sluggish profitability and currency depreciation are making it difficult for the firms to meet repayment obligations. In domestic borrowings, the corporate stress has led to higher non-performing assets of banks but there has been no sign of systemic risk to the banking sector.

Trends in Agricultural Production

The fourth advance estimates of agricultural production in 2012-13 see only a small change in output forecasts, but the outlook for 2013-14 is for a substantially higher level of foodgrain production. In the recent past, the area and production of non-foodgrains has risen faster than of foodgrains.

RBI's Policy Stance

The Reserve Bank of India has in its attempt to control the exchange rate volatility of the rupee perplexed the market. The short-term measures announced to limit money market liquidity went against its accommodative medium-term stance, causing considerable uncertainty in the market. In hindsight, they seem to have hurt the financial system as a whole.

RuPay Card: An Alternative

"RuPay", the new Indian alternative to international credit/debit card-based systems, is a boon to the Indian user and merchant. Fees for both will be lower and the need to go in for expensive international settlement can be avoided. RuPay, an initiative of the RBI, can be issued by cooperative and regional rural banks as well; this will enable usage in smaller towns hitherto excluded from the Visa/MasterCard system.
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