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Purpose: Interest rate derivatives (IRDs) are the essential components of financial risk management and are used across various industry sectors. The objective is to analyze the differences in approach to managing interest rate risks between the Indian corporates that execute IRDs and the ones that do not. Design/methodology/approach: Interest rate fluctuations require Indian corporates to hedge their exposures in foreign currency interest rates. This is all the more true for mid-sized corporates because of their balance sheet exposures. Additionally, they may not have the resources to formulate risk management policies. This paper analyzes data collected from financial statements of a diverse set of companies that use IRD and helps in formulating such a strategy. Findings: The results indicate significant differences for some of the parameters like information asymmetry and agency cost between users and non-users of IRDs. The study further suggests causality between users of derivatives and parameters like size, growth and debt. Research limitations/implications: The study compares users and non-users of IRDs, thereby identifying factors unique to users of IRDs. It also studies causality relations which explain the motivation to do IRDs. Thus, it enables risk managers to use this as a reference point to decide on their strategies. Originality/value: While there are multiple studies across geographies and sectors including commercial banks in India on the usage of interest rate swaps, this study focuses on Indian mid-tier corporates. Furthermore, the study distinguishes between users and non-users based on financial parameters, which in turn would provide a framework for decision-hedging strategies. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to assess the efficiency of managing working capital in 1,388 Indian manufacturing firms from 2008 to 2019 and investigate the effects of firm-specific and macro-level determinants on working capital management (WCM) efficiency. Design/methodology/approach: The current study accommodates a slack-based measure (SBM) in data envelopment analysis (DEA) for computing WCM efficiency. Further, we implement a panel data fixed-effects model that controls for heterogeneity across firms in determining the relationships of selected variables with WCM efficiency. Findings: The results highlight that manufacturing firms operate at around 50 percent efficiency, which is constant throughout the study period. Furthermore, among the selected variables, yield, earnings, age, size, ability to create internal resources, interest rate and gross domestic product (GDP) significantly affect WCM efficiency. Originality/value: Instead of the traditional models used for assessing efficiency, the SBM-DEA model is unit-invariant and monotone for slacks, implying that it can handle zero and negative data, which overcomes the incapability of prior DEA models. Hence, this provides accurate efficiency scores for robust analysis. Additionally, this paper provides a holistic working capital model recognizing firm-specific and macro-level determinants for a more explicit estimation of the relationship between WCM efficiency and the selected determinants. [ABSTRACT FROM AUTHOR]

The crowding out effect is an economic theory which argues that rising government spending or borrowing drives down private sector spending. In simple words, if the government borrows huge money from the money markets, then the private borrowers do not get access to the required capital. The excessive government borrowings can also influence interest rates, thus impacting the cost of funds for commercial borrowers. This paper tests, using statistical tools, if government borrowing affects the availability of funds for commercial enterprise. If it affects the availability of funds for private enterprises, then it could impact private sector spending. The paper also tests if government borrowing impacts the interest rates and consequently the cost of funds for private borrowers. [ABSTRACT FROM AUTHOR]

This paper establishes a predictive relationship between financial vulnerability and volatility in emerging stock markets. Focusing on China and India and utilizing GARCH-MIDAS models, we show that incorporating financial vulnerability can substantially improve the forecasting power of standard macroeconomic fundamentals (output growth, inflation and monetary policy interest rate) for stock market volatility. The findings have significant implications for investors to improve the accuracy of volatility forecasts. [ABSTRACT FROM AUTHOR]

Prosocial P2P lending platforms are a novel and powerful example of a digital social innovation (DSI) in which the operating model relies primarily on digital technologies and the overarching focus is on the "social" aspect of the innovation. These platforms establish a virtual connection between low‐income individuals and lenders, helping the former access loans at low rates of interest. In realising their mission of fighting poverty, prosocial P2P lending platforms maintain a challenging hybrid – online and offline – focus. This paper explores how prosocial P2P lending platforms enact their hybrid orientation. It draws on an inductive qualitative study of Rang De, India's first prosocial P2P lending platform. The analysis highlights five clusters of actions: digital attention‐building, digital credibility‐building, digital empathy‐building, intermediary relationship‐building, and borrower relationship‐building. The paper argues that significant strengths on the online side help establish a sustainable business model. A willingness and commitment to maintain a high degree of engagement with the complex offline world of low‐income borrowers helps develop the model as an impactful social innovation. [ABSTRACT FROM AUTHOR]

Purpose: Timely access to reasonably priced financing is critical to promote and sustain small and medium sized businesses (SMEs). This study aims to examine the role of the newly constituted SME exchanges in funding the growth of Indian SME firms. The impact of obtaining public equity capital on the firm's growth prospects, capital structure and credit profile is the focus of this paper. In addition, this study compares the cost and speed of raising capital on specialised SME exchanges to the main board. Design/methodology/approach: To examine the impact of raising public equity capital, this study uses a difference-in-difference (DID) regression analysis. SMEs that raised financing on the SME exchange between 2013 and 2018 make up the treatment sample. This study uses a propensity score matching technique to find the control group from a sample of unlisted enterprises to reduce the likelihood of selection bias. Findings: This study finds that SME profitability drops after an initial public offering (IPO), which is consistent with previous research. This study also discovered that after a company is listed, its total debt falls. This study also shows that after the IPO, there is no change in the borrowing costs of SME enterprises. Finally, this study finds an evidence of a decline in sales growth following the IPO, implying that the firms use the IPO money to rebalance their accounts after a period of heavy investment rather than for growth finance. Originality/value: A thriving and efficient equity financing market for SMEs has the potential to establish itself as a viable alternative to the existing dominant bank financing option. To the best of the authors' knowledge, this research is the first to examine the role of SME exchanges in the funding of Indian SME firms. [ABSTRACT FROM AUTHOR]

With the current depletion of fossil fuels and its price hikes, the need of the hour is an alternative source of energy for the vehicles. Electric Vehicles are the solution for the industry as well as for the environment in India. However, the current market penetration of electric vehicles is rather low. There is a need to study the factors influencing the consumer's acceptance of such electric cars. Various factors that influence the purchase decision of car buyers are based on individual perception of dimensions like environmental issues, cost, trust, technological advancement, infrastructure and societal acceptance. The results of the study show that positive environmental effects associated with electric cars along with the no costs of fuel involved happen to be the biggest motivators for the consumer when it comes to purchasing electric cars. On the contrary, cost of the electric car and lack of charging infrastructure happen to be the factors which demotivate adoption of electric cars. Thus, to promote the sales of electric cars the government has to play a leading role by developing satisfactory infrastructure, creating environmental policies, subsidizing the cost of the electric vehicles and providing financial incentives like lower interest rate on car loans and tax reductions on the purchase of electric cars. Through this paper, the potential scope of electric cars in the city of Kolkata will be studied and the consumer perception for same will be analysed. [ABSTRACT FROM AUTHOR]

This paper analyzes the economics of a grid-interactive rooftop solar photovoltaic (PV) system and the impact of the temperature on it. The analysis related to energy metrics, lifecycle costing, and environmental economics was performed considering the PV system's life as 30 years. The system economics is also compared at different conditions like theoretical, temperature-corrected, and real electricity generation data. The parameters like energy payback time (EPBT), energy return on energy invested (EROI), and lifecycle conversion efficiency are determined as 5.95 years, 5.04, and 0.078, respectively, based on actual generation. The unit electricity cost of the rooftop PV system was estimated as INR 5.37 at the 5% interest rate. The electricity cost varies with the interest rate variation and operation system life. The results show a reduction in overall economic performance on the increase in module temperature. The effect of temperature on the economics of the system is presented in terms of the per degree rise of module temperature. One degree increase of module temperature 8.5 days in EPBT of the PV system increases, and INR 0.021 increases in the unit cost of electricity considering a reference temperature 25 °C. A PV system has environmental benefits by reducing greenhouse gas emissions, which are also affected by the rise of module temperature. The system lost INR 355.93 in carbon credits at an increase of one-degree module temperature. [ABSTRACT FROM AUTHOR]

Covid-19 (C-19) has resulted in economic and financial meltdowns across the world. The countermeasures to tackle the virus created economic loss for people from every stratum. Macroeconomic indices like unemployment, inflation, and GDP growth rates were severely hit. This study estimates the C-19's volatility impact on four macroeconomic variables (gold prices, interest rate, crude oil prices, and exchange rate in the Indian economy. The paper uses daily time series data of the macroeconomic variables and cases of C-19 in India for the period from 5th January 2020 to 4th April 2022. The volatility impact of COVID-19 is measured using Bi-Variate GARCH models. The GARCH models (BEKK-GARCH [BG] and DCC-GARCH [DG]) provide robust results. The result finds the existence of both short and long-term C-19's volatility impact on all variables, although in different degrees. This paper is original since it considers the impact of these four variables altogether and the study contributes to the literature by capturing the volatility spillover effects of these four variables using BEKK-GARCH and DCC-GARCH. This paper significantly delivers key implications to policymakers to critically treat C-19 for economic stability while making policies. [ABSTRACT FROM AUTHOR]

Using cross‐section data on small and medium enterprises (SMEs), the paper examines the importance of gender on discouraged borrowers in India. We distinguish the role of women across various capacities, such as owner, manager and owner‐manager. Controlling for potential endogeneity, the findings indicate that firms with women managers and those where women perform dual roles are more likely to be discouraged from borrowing. Furthermore, we show that interest rates and procedural complexities to be the key reasons that inhibit borrowing. Robustness tests lend credence to these findings. [ABSTRACT FROM AUTHOR]

The paper investigates the nature of credit transactions in artisanal marine fishing in a developing economy by analysing the case of Kerala, a south Indian state of India. The study examined the structure of credit in marine fishing and its composition; interlocked credit-market and credit-labour transactions; segmentation of credit market; interest rate variations, and the potential reasons for high penetration of informal credit in marine fisheries in the background of a relatively better developed formal financing system in sectors outside fishing. The study concludes that the risk-sharing role of the informal credit in addressing the high variability of the income stream in marine fishing and the failure of the formal system to develop credit products internalising the risk element perpetuates the informal credit dominated by output-credit interlocking between fishers and auctioneer-creditors. While the fishers share the risk of high variability in income stream through the sharing arrangement, the auctioneer-creditors are assuring the flow of fish to be auctioned. However, the system is not without "exploitative elements" triggered by the monopoly power of stakeholders, particularly auctioneer-lenders. The traditional "triadic system" involving fishers, auctioneer-lenders and the society as regulators of trust that sustained the informal credit system is weakening due to extraneous forces. The study highlights the need to have credit products that bundle insurance. [ABSTRACT FROM AUTHOR]

The microfinance sector has played a vital role in economic development and financial inclusion in India. However, with the COVID-19 pandemic affecting economic activities, microfinance institutions (MFIs) were impacted adversely. The Government of India introduced a moratorium to borrowers for loan repayments. This study examines the impact of the government's initiative of easing borrowers' financial burdens and the number of active COVID-19 cases on the operational efficiency of MFIs in Indian states. Additionally, the analysis explores the macro-economic determinants of MFI performance. The study incorporates the random effects robust regression model. The findings suggest that interest rate and inflation impact every MFI performance criterion while national income only affects the loan penetration efficiency of MFIs. It is also found that the moratorium significantly helped borrowers, whereas, it had adverse effects on the loan penetration by MFIs. Lastly, it is shown that MFIs remained resilient to COVID-19 cases, except in the case of reduced number of borrowers. [ABSTRACT FROM AUTHOR]

Purpose: This paper evaluates the working capital management (WCM) efficiency of the Indian manufacturing industries through data envelopment analysis (DEA) and empirically investigates the influence of several exogenous variables on the WCM efficiency. Design/methodology/approach: WCM efficiency was calculated using BCC input-oriented DEA model. Further, the panel data fixed effect model was used on a sample of 1391 Indian manufacturing firms spread across nine industries, covering the period from 2008 to 2019. Findings: Firstly, the WCM efficiency of Indian manufacturing industries has been stable over the analysis period. Secondly, the capacity to generate internal resources, size, age, productivity, gross domestic product and interest rate significantly influence WCM efficiency. Research limitations/implications: First, the selected study period has observed various economic uncertainties including demonetization and recession, so the scenario might differ in normal conditions or country-wise. Second, the findings might not be generalizable to the developed economies, since the current study sample belongs to a developing economy, which further provides scope for comparative study. Practical implications: An efficient model for managing the working capital comprising most vital determinants could enhance the firms' valuation and goodwill. Also, this study would be helpful for financial executives, manufacturers, policymakers, investors, researchers and other stakeholders. Originality/value: This study estimates the industry-wise WCM efficiency of the Indian manufacturing sector and suggests measures to the concerned parties on areas to focus on and provide evidence on the estimated relationships of firm-level and macroeconomic determinants with WCM efficiency. [ABSTRACT FROM AUTHOR]

The present paper deals with the economic viability of a coal-fired power plant (CFPP) situated in the northern part of India. The plant with a capacity of 250 MW at various load conditions has been evaluated from an economic point of view. The present worth method is used for the evaluation of CFPP. Revenue earned, operating cost, fuel cost, insurance cost, maintenance cost, pumping cost and net present value are evaluated w.r.t interest rate, number of employees, and plant life. The payback period and the impact of various factors on plant net present value is assessed by taking plant life as 30 years. With the increase in interest rate, all the cost decreases for fixed plant life of 30 years. However, operating cost increases with the increase in the number of employees. Also, with the increase in plant life, all type of cost increases, however after 25 years, the net present value starts decreasing according to the present study. The result of this study concludes that the payback period of the plant is 10 years. It is expected that the outcomes of this case study will be beneficial for future researchers. [ABSTRACT FROM AUTHOR]

This research article scrutinises the connotation among bond prices and electricity prices (EP) across different threshold regions in India using threshold regression analysis. We resolve to investigate whether or not there exists a non-linear association between bond prices and EP and if this relationship differs across different threshold regions. The data covers a period of five years from 2018 to 2022, and the analysis includes three different threshold regions based on different threshold bond prices. The results show that there exists significant non-linear association between bond prices and EP, and this relationship differs across the three threshold regions. We surmise presence of an optimality between bond prices (interest rates) and EP, beyond which the EP increase. We conclude that as interest rates increase, the cost of financing for electricity companies also increases, which may lead to higher EP. However, there may be a certain threshold beyond which the cost of financing becomes too high, leading to a decrease in investment and ultimately a decrease in electricity supply, which in turn could lead to higher EP. [ABSTRACT FROM AUTHOR]

Purpose: A change in monetary operating procedures provides a natural experiment which is used to evaluate, first, whether Indian monetary policy transmission is better when durable liquidity is in surplus or when it is in deficit; second whether it is better with interest rates as the policy instrument or quantity of money or a mixture of the two. Design/methodology/approach: This study first shows that the period of analysis can be divided into two separate regimes one of liquidity surplus (2002–2010) and the other of deficit (2011–2019).This study then estimates separate structural vector auto-regressions (SVARs) for the financial and real sector, with relevant exogenous foreign, policy and other variables for each of the periods as well as SVARs for the whole period with alternative operating instruments. Findings: Monetary transmission from the repo rate was better during the period the liquidity adjustment facility (LAF) was in surplus with the central bank in absorption mode denoting excess durable liquidity. Pass through was faster and the repo rate had a greater influence on other variables. The impact of the rate on output gap exceeds that on inflation. The weighted average call money rate was found to outperform others as the operating target. Monetary policy has evolved so that policy rates are more effective in transmission compared to money supply, but best results are when durable liquidity is also in surplus. Originality/value: The results contribute to ongoing debates on the Indian monetary policy framework and give useful inputs for policy in emerging markets where research is scarce. They suggest keeping the LAF in deficit mode over 2011–19 was not optimal. [ABSTRACT FROM AUTHOR]

The significance, nature, and direction of the effect of inflation on economic growth and macroeconomic stability are contentious both in theory and empirical analysis. This paper examines the causal relationship between inflation and macroeconomic variables - interest rate, exchange rate, money supply, GDP, and fiscal deficit - in India, during the period 1986 to 2016, applying the vector correction (VECM) estimation method. The macro variables are stationary at first difference, and a cointegrating and causal relationship exists between the wholesale price index and interest rate, exchange rate, GDP, broad money, and gross fiscal deficit. The VECM estimates reveal that money supply and GDP are the most important macro variables in explaining the variations in inflation. The estimated error correction term shows that the shortrun disequilibrium is corrected by about 20% every period towards the long-run equilibrium. The impulse response results show that inflation responds positively to the money supply from the start to the 9th period. To promote economic growth and keep inflation low, money supply and budget deficits need to be rationalised. [ABSTRACT FROM AUTHOR]

• We estimate macroeconomic shocks using a medium scale new Keynesian model for India. • Our smoothed estimates of shocks mimic the actual transition of the economy during 1997–2019. • We find that the interest rate remained contractionary during 2013–16 despite falling inflation, characterized as policy error. • If supply side shocks (adverse productivity or mark-up) dominate, such policy errors tend to occur. • Such large-scale policy error can disrupt financial intermediation by creating bad assets in the banking sector. In the immediate aftermath of the global financial crisis, the monetary policy in India became accommodative as in other major economies, but the policy subsequently turned highly contractionary despite falling inflation, which we characterize as policy errors. Government expenditure also had similar pattern. This paper therefore estimates a medium scale New Keynesian model (with earnings and assets based collateral constraint) to explore the impact of such policy errors on Indian business cycles, capturing the prevailing narrative on both monetary and fiscal policies along with the actual inflation scenario. Our smoothed estimates of mark-up, productivity, interest rate and government expenditure shocks mimic the actual transition of the economy, with both policy shocks moving together in a similar pattern in the post crisis period. We find that the interest rate policy was highly contractionary during 2013-2016 which led to significantly lower output. We rationalize that if supply side shocks (adverse productivity or mark-up) dominate, such policy errors tend to occur, suggesting that policy makers need to pay attention to the sources of inflation in a developing economy while setting demand-management policies. Given the current pandemic as more of a adverse supply shock, similar policy errors are likely to occur if interest rate responds to this type of inflationary shocks. [ABSTRACT FROM AUTHOR]

Venture capitalists (VCs) flourish on the ability to add funds to their kitty across nations. Consequently, VCs' ability to convince Limited Partners (LP), who are their primary source of financing, plays a critical role in the venture capital investment growth in any economy. However, it is not easy to rake in capital from an investor. LPs assess the market conditions carefully before making their capital available to the VCs. This paper examines the macro-economic variables that influence the supply of money to venture capital funds in emerging economies such as India from an LPs perspective. The empirical analysis using Autoregressive-Distributed Lag (ARDL) approach reveals that supply of capital to the VC funds in India is influenced by macro variables as well as past investment behaviours. Macro-variables such as GDP growth, interest rate spread, global liquidity, and inflation rate significantly influence the supply of capital to the VC funds in India. However, stock market liquidity does not influence the supply side of the venture capital investment. Our analysis reveals that VCs' fund raising in India is highly influenced by their past investment relation with the LPs. [ABSTRACT FROM AUTHOR]

The existing literature portrays that the instruments of monetary policy, such as interest rate, money supply, and price have a direct bearing on economic growth and social welfare. Against this background, the present study investigates the monetary policy transmission on manufacturing output in one of the fastest‐growing economies—India. Highlighting how the Central Bank works in a political–economic context, the precise research question used entails—how does monetary policy affect the manufacturing output in India? And what is the transmission channel and level of magnitude? To address these questions, we employed autoregressive distributed lag bounds testing for co‐integration on the time series data collected from World Development Indicators and International Finance Statistics for the period from 1980 to 2018. The model estimation affirms the presence of a co‐integrating relationship among the variables. In the short run, we have a mixed result of relationship among determining variables and manufacturing output, while in the long run, the lending rate has positive and the exchange rate has significant relationships among the variables. The variables such as consumption and gross capital formation have insignificant influence even though negative. The causality test reveals unidirectional short‐run causality stemming from lending rate to industrial output testifying lending rate‐driven growth. In a nutshell, the lending rate has long‐term positive relationship with that of industrial output, and the functional independence of the Central Bank has long‐term consequences on output and this requires a right chord of balance to be struck between political motives and the RBI's autonomy. [ABSTRACT FROM AUTHOR]

Purpose: The study examines how the liquid assets holdings among non-financial Indian firms vary due to tightening monetary policy and increasing macroeconomic uncertainty. Design/methodology/approach: The authors analyze 5,640 firms for the period 2011–2021. The authors first estimate India's monetary policy shocks by decomposing the exogenous shocks from the systematic component of monetary policy changes. The authors then examine the effects of the estimated monetary policy shocks and a range of macroeconomic and policy uncertainty indicators on companies' cash and bank balances to asset ratios using two-step system generalized method of moments (GMM) estimators. Findings: The authors find that monetary policy shocks cause the cross-sectional variances for the firms' liquidity holdings to increase. In anticipation of macroeconomic volatility, companies respond to these shocks after taking into account all the firm-level information to minimize the opportunity costs of holding extra cash or too few cash balances that can hamper firms' operations. Furthermore, compared to other shocks, the contribution of inflation-induced shocks is predicted to be the largest in the cross-sectional deviation of the firm's cash holdings. The authors also find that low-growth, older and financially constrained firms observe lesser heterogeneity in their cash holdings as they tend to hold cash as a precautionary buffer. Originality/value: The authors' approach to the analysis is unique in many ways. To address potential transmission bias, the authors use nowcasts and forecasts of real gross domestic product (GDP) growth and inflation to generate a series of exogenous monetary policy shocks for identifying unanticipated changes in short-term interest rates. Subsequently, the authors estimate how these shocks affect the cross-sectional deviation of liquid assets. For estimating the effects of macroeconomic uncertainty on corporate cash demand, the authors utilize a range of proxies for uncertainty. Unlike previous attempts, the authors offer evidence for a developing and fast-emerging economy. [ABSTRACT FROM AUTHOR]

Islamic microfinance institutions (IMFIs) have had their roots in India originating as far back as 1918. It is founded on the principle which prohibits interest and hence is a form of non-interest microfinance to the poor. It also provides micro-credit services through Shari’ah compliant structures to small dealers and traders who have limited to no access to the formal financial services. Islamic microfinance offers a more sustainable and successful microfinance which not only creates financing but also blends in empathy for the poorest of the poor. In the Islamic perspective, poverty alleviation is more comprehensive than the conventional one. It flags equity and cooperation-based models in contrast to models that create and perpetuate debt. However, the past of IMFIs in India depicts an unfortunate tale. The IMFIs established during the eighties, rose and matured quickly. Nevertheless, over the course of time they encountered numerous hurdles that lead to their closure in many places. Therefore, it becomes vital to study the factors that caused the IMFIs downfall in India. The objective of this research is to know the challenges of Islamic microfinance in India and give suggestions and possible solutions to resolving the issues. This study adopts the quantitative approach. In this research the population is known and hence probability sampling or random sampling is selected. The data gathered from the303 responses received is analyzed using SPSS22 software. The findings of this research show that the majority agrees that there is lack of government support, no proper marketing of Islamic microfinance products, no effective Islamic microfinance products in India, lack of human capital in microfinance, high interest rates that make the poor financially unstable and lack of microfinance institutes in rural areas. This study offers robust recommendations on the challenges of Islamic microfinance in India and henceforth, it will be of interest to regulators, stakeholders, as well as the existing and potential customers. [ABSTRACT FROM AUTHOR]

Do the different types of financial friction have differential implications for monetary transmission in emerging economies? We investigate this question using India as the country for analysis. We adopt a New Keynesian business cycle model with bank intermediation, extend it by the Indian economy‐specific features and validate with the data. The baseline model explains the co‐movements of interest rates, incomplete pass‐through and sluggish adjustment mechanism of the macro‐financial variables for a policy interest rate shock. It identifies the collateral‐constrained, financially excluded households and low proportion of savers as the primary sources of frictions causing weak monetary transmission. [ABSTRACT FROM AUTHOR]

COVID-19 has destabilized economies, lives all over the globe with devastating impacts. Physical and mental health suffered hugely due to this pandemic. Moreover, educational institutes were forced to shift from offline to online mode. This study aims to identify critical societal constructs which got impacted due to the COVID-19 pandemic in India and Bangladesh. Further, a comparative analysis has been carried out to assess these impacts between these two countries from a social science point of view. A cross-sectional study has been conducted through a structured questionnaire based on pilot study. Google Survey form link of questionnaire was active from March 15, 2020 to July 14, 2020 in which 1023 responses were received with a response rate of 54%. After the elimination of missing responses, 802 complete responses were finally coded on 48 variables including demographic profile of the respondents. Factor analysis is used to identify critical constructs of the study whereas hypothesis testing to carry out for comparative understanding. The study found that COVID-19 pandemic has severely impact on psychological, educational, economic, and social aspects of both countries whereas Bangladesh has significant adverse impact than India. Economic stimulus program such as tax exemption, EMI moratoriums, mental health training, E-learning, low interest rate of soft loan disbursement are noteworthy requirement to overcome the adverse impact of COVID-19. [ABSTRACT FROM AUTHOR]

The business sector's finances have already begun to suffer as a result of decreased production and lockdowns, which have already begun to take their toll. In order to keep operations running smoothly, a significant public budget or stimulus is required to address issues such as interruptions in supply chains, difficulties in manufacturing, and paralyzed health systems. The banking and financial industry, whose prospects are related closely to those of the economy, is sure to face the brunt of the anticipated slowdown in economic development. The International Monetary Fund has reduced India's GDP growth prediction to 1.9 percent for 2020-21. There is a possibility of an increase in defaulted loans. "The downturn might potentially lead to job losses, which could put on on the retail lending books of financial institutions. The loss of revenue from tourism and the entertainment industries, amongst many other areas of business, has already damaged the economy. These and other such factors are all building up to put a burden on the economy of the whole world, which may potentially have ramifications for the next few years. The governments, central banks, and regulatory bodies in the Asia- Pacific region have each implemented their own unique set of countermeasures in response to COVID-19. These include the infusion of additional cash, loans directed at damaged companies and areas, and reductions in the policy interest rate. Additionally, it involves assistance for financial institutions in their provision of forbearance to economically viable people and companies that were negatively impacted by COVID-19. [ABSTRACT FROM AUTHOR]

The stable money demand function is a crucial policy tool of the monetary policy of any central bank, which links the monetary sector of an economy to its real sector. Notably, after the global financial crisis of 2007–08, the role of money has come to be envisaged as an essential issue while formulating and conducting the monetary policy, especially at zero lower bound. It is crucial to know whether money demand is stable for inferring a sound monetary policy. To this end, the present study examines the short- and long-run money demand relationship and its stability in India from 2006:Q3 to 2019:Q4. The study has employed a dynamically simulated autoregressive distributed lag (ARDL) cointegration approach, which shows a well-specified and stable money demand in India after incorporating the inflation forecast variable as one of the essential determinants along with other covariates. Furthermore, the dynamically simulated impulse response also supports the economic relationship among variables. The current finding of stable money demand implies a policy implication in terms of focusing on monetary aggregate, in the ongoing flexible inflation targeting framework, as one of the essential information or indicator variables, which acts as a long-term assessment of short-term interest rate setting behaviour to achieve the macroeconomic goals. [ABSTRACT FROM AUTHOR]

A significant proportion of India's tribal population lives in isolated regions with limited access to capital, markets, infrastructure, and technology. They continue to rely on informal financing sources with high interest rates and onerous terms. The government implemented numerous programmes to boost entrepreneurship and raise income levels in order to address their livelihood concerns. In this context, the present study examines the role of government financial and marketing assistance in the development of tribal entrepreneurship. The study relied on both primary and secondary data gathered from 15 Indian states. Majority of the beneficiaries' projects were physically inspected for evaluation purposes. The findings of the study suggest that the three NSTFDC income-generation schemes have had mixed results in terms of offering livelihood options to Scheduled Tribes (STs). These programmes have shown to be quite beneficial to tribals in some states, but not in others, suggesting that the state governments can harness the hidden entrepreneurial skills of tribal people by providing only small financial, technical, and marketing support. [ABSTRACT FROM AUTHOR]

This study assesses the role of monetary, fiscal factors, and trade openness causing variations of nominal and real interest rates in India for the deregulated regime. The autoregressive distributive lag (ARDL) bounds testing approach to cointegration finds that deposit rate, lending rate, and real interest rate have long‐run associations with the monetary, fiscal policy instruments, and trade openness. The error correction model representation of the ARDL framework finds that the broad money supply negatively impacts the deposit rate and the real interest rate, while positive impacts of income on each of the three interest rates are noticed. The fiscal deficit has a significant short‐term negative impact on the deposit rate and has a positive impact on the real interest rate. The exchange rate and openness to trade lower interest rates. The econometric appraisal may be perceptive to keep interest rate in the desired trail through the judicious adjustments of the policy instruments and deficit management. The significant impact of openness to trade on interest rates is a critical issue that the macroeconomic policy may face more challenges. [ABSTRACT FROM AUTHOR]

The supervised machine learning algorithm‐based logistic regression predicts the loan default risk by correctly identifying banks with risky/safer loans in the Indian commercial banking sector. Higher levels of interest income and spread have been found negatively associated with the probability of loan default risk, while interest expended, operating expenses and credit deposit ratio are positively related to the level of loan risk. The study recommends that a high spread, low rate of interest expended and lower operating expenses, will effectively lower the probability of loan default risk in the Indian banking sector. [ABSTRACT FROM AUTHOR]

The study examines the impact of bank-specific and macroeconomic factors on the profitability of Indian scheduled commercial banks. The analysis is based on the panel data of 71 scheduled commercial banks in India for a period of 15 years. Traditionally, banking performance is measured by return on assets, and factors such as bank size, operating efficiency, credit risk, Non-Performing Assets (NPA), Ratio of Interest Income (RII), cost of funds, capital ratio, deposit ratio, ratio of priority sector lending, liquidity and asset management are used as bank-specific factors. GDP, inflation, interest rate, demonetization and financial crisis are used as macroeconomic factors. Linear regression model is used with pooled, fixed and random effect methods. The results show that bank-specific factors such as operating efficiency, NPA and RII have a statistically negative impact on ROA, while asset management has a favorable influence. In terms of the effect of macroeconomic determinants, the results show that GDP, interest rate, demonetization and financial crisis have a negative effect, while inflation is coefficiently negative but has an insignificant impact on ROA. [ABSTRACT FROM AUTHOR]

Purpose: The study aims to empirically analyze whether financial literacy can improve the financial behavior of individuals in the context of emerging markets like India. Design/methodology/approach: The authors use the nationally representative Financial Inclusion Insights survey conducted in India during 2018 for the analysis. The authors consider the financial literacy score based on the standard financial literacy quiz that includes understanding basic numeracy, interest rates, inflation and diversification concepts to study its effect on payment attitude, savings attitude and risk management behavior proxied by insurance uptake. Using an instrumental variable approach, the authors account for the possible endogeneity associated with the financial literacy variable. Findings: The authors find that less than 9% of individuals have correctly answered questions capturing all four aspects of financial literacy. The analysis suggests that improvements in financial literacy scores indeed increases the likelihood of exhibiting superior financial behavior. The results are robust to alternative definitions of financial literacy, outcome variables and inclusion of additional controls. The authors find that financial literacy increases financial planning, and this, in turn, possibly improves financial behavior. The effects are prominent for those residing in the urban area and having confidence in their financial skills. Originality/value: This is among the few studies that provide insights regarding how improvements in financial literacy can improve financial behavior in an emerging economy context. Moreover, this study highlights financial planning as a possible channel through which financial literacy affects financial behavior. Further, the heterogeneous effects based on the area of residence and own ability underscore the need for complementary policies. [ABSTRACT FROM AUTHOR]

This study examines the determinants of bank deposits with special focus on bank ownership. The study uses the data of 39 commercial banks of India for the period 2001-2020. System GMM is used to analyse the impact of various factors on the volume of bank deposits. The log of the aggregate deposits of a bank is used as a dependent variable in this study. Independent variables include lagged value of the dependent variable, average term deposit Rate, lagged value of NPA ratio, number of branches, ownership dummy and an interaction term between ownership dummy and bank size. Empirical results revealed that deposit rates and branches have insignificant impact on volume of bank deposits and lagged value of NPAs and ownership dummy have significant negative impact. However, the main finding of this study is that the size of the banks would influence the impact of ownership on the volume of deposits. [ABSTRACT FROM AUTHOR]

False negative rates of severe acute respiratory coronavirus 2 diagnostic tests, together with selection bias due to prioritized testing can result in inaccurate modeling of COVID‐19 transmission dynamics based on reported "case" counts. We propose an extension of the widely used Susceptible‐Exposed‐Infected‐Removed (SEIR) model that accounts for misclassification error and selection bias, and derive an analytic expression for the basic reproduction number R0 as a function of false negative rates of the diagnostic tests and selection probabilities for getting tested. Analyzing data from the first two waves of the pandemic in India, we show that correcting for misclassification and selection leads to more accurate prediction in a test sample. We provide estimates of undetected infections and deaths between April 1, 2020 and August 31, 2021. At the end of the first wave in India, the estimated under‐reporting factor for cases was at 11.1 (95% CI: 10.7,11.5) and for deaths at 3.58 (95% CI: 3.5,3.66) as of February 1, 2021, while they change to 19.2 (95% CI: 17.9, 19.9) and 4.55 (95% CI: 4.32, 4.68) as of July 1, 2021. Equivalently, 9.0% (95% CI: 8.7%, 9.3%) and 5.2% (95% CI: 5.0%, 5.6%) of total estimated infections were reported on these two dates, while 27.9% (95% CI: 27.3%, 28.6%) and 22% (95% CI: 21.4%, 23.1%) of estimated total deaths were reported. Extensive simulation studies demonstrate the effect of misclassification and selection on estimation of R0 and prediction of future infections. A R‐package SEIRfansy is developed for broader dissemination. [ABSTRACT FROM AUTHOR]

Rural indebtedness is a major development challenge confronting India. In 2018, scores of farmers protested rising household debt, and the popular coverage of the time asserted that farmers were under crushing debt. Combining data from the All‐India Debt and Investment Survey with other sources and using a class analysis, I interrogate this "crushing debt" narrative. Rural households, depending on the socioeconomic and contextual vulnerabilities that they experience, are indebted in different ways. The rural elite borrow more loans and have higher loan amounts, while asset‐poor households are more dependent on informal credit sources and also pay higher rates of interest. Households from the wage worker class are more likely to be over‐indebted relative to others. I further find that petty commodity producers bear less debt burden and are less likely to be over‐indebted relative to other classes. These findings underscore the fact that rural indebtedness is a nuanced problem that manifests in a multitude of ways across India. [ABSTRACT FROM AUTHOR]

This article examines the key factors, which offer to explain the demand for credit in the micro, small, and medium enterprises (MSMEs) in India. The study uses survey data of five industries such as apparel, footwear, textile, sports goods, and furniture with sample size 320 firms based on purposive sampling techniques. The probit regression model analyzed the factors of the demand for credit by MSMEs and found that exports and government scheme have positive impact on demand for credits, whereas high interest rate, high collateral rate, unfavorable terms, and conditions of bank loans and lengthy and intricate process in applying for bank loans have negative impact on the demand for credit. [ABSTRACT FROM AUTHOR]

Purpose: The present study aims to evaluate the aggregate consumption function from the perspective of the Euler equation using Indian macroeconomic data. Further, to examine the robustness of the findings for India, other developing nations are also studied. Design/methodology/approach: Quarterly time-series data from 1996:1 to 2020:3 on consumption and income in India are used to evaluate the alternative model proposed by Campbell and Mankiw (1989). The alternative hypotheses in the present study are tested by estimating models using the instrumental variable approach. The lagged changes in the quarterly average of 91-day Treasury bill yields are used as the nominal interest rate instrumental variables along with other lagged instrumental variables. Findings: The evidence presented in this study suggests that aggregate consumption is better explained when the permanent income model incorporates rule-of-thumb consumers, that is, individuals who consume their current income along with those who consume their permanent income. Practical implications: The new rule-of-thumb framework better explains some of the observed phenomena, such as why the expected changes in consumption are related to the expected changes in income, why the expected changes in consumption are unrelated to real interest rates (i.e. why the intertemporal elasticity of substitution is near zero) and why a high consumption/income ratio is usually followed by an increase in income growth. Originality/value: This study adds to the limited literature on the Euler-based consumption function in developing economies. [ABSTRACT FROM AUTHOR]

The proposed research work presents the performance analysis of the vertically mounted bifacial module (VBFM) with and without tracking during the summer and winter seasons. Also, various parameters like energy efficiency, electrical efficiency, electrical exergy, thermal exergy, exergy efficiency, environmental analysis, economic analysis, exergoeconomic analysis, enviroeconomic analysis, and exergoenviroeconomic analysis of the VBFM were studied and presented. The comparative analysis was carried out between two bifacial solar modules installed in two different orientations (east–west and south-north). The experiments were conducted in the real climatic condition of Minjur, Tamil Nadu, India. Under the summer and winter climatic conditions, when the lifetime period of 10, 15, and 20 years are considered higher energy production factor and higher life cycle conversion efficiency was obtained from the vertically mounted bifacial module—east–west (VBFM-EW) with tracking during summer and vertically mounted bifacial module—north–south (VBFM-SN) module without tracking during the winter season. Exergetic cost was calculated by considering 15, 20, 25, and 30 years of the system with 2%, 5%, and 10% interest rates. The maximum exergetic cost was obtained from 30 years of the system under a 2% interest rate. The enviroeconomic and exergoenviroeconomic analysis provides the carbon credits earned from the E-W module was a maximum of Rs 11,036.18 during the summer season and Rs 12,413.48 from the VBFM-SN module during the winter season, considering the life of the system as 15 years. [ABSTRACT FROM AUTHOR]

Malnutrition continues to be a primary concern for researchers and policymakers in India. There is limited scientific research on the effect of agriculture on child nutrition in the country using a large representative sample. To the best of our knowledge, no study has examined the spatial clustering of child malnutrition and its linkage with agricultural production at the district-level in the country. The present study aims to examine agricultural production's role in improving the nutritional status of Indian children through child feeding practices. The nutritional indicators of children from the National Family Health Survey-4 (2015–16) and the agricultural production data for all the 640 districts of India obtained from the District-Wise Crop Production Statistics (2015–16), published by the Ministry of Agriculture, Government of India were used for the analysis. The statistical analysis was undertaken in STATA (version 14.1). ArcMap (version 10.3), and GeoDa (version 1.8) were used for the spatial analysis. The study found a higher prevalence of malnutrition among children who had not received Minimum Meal Frequency (MMF), Minimum Dietary Diversity (MDD), and Minimum Acceptable Diet (MAD). Further, child feeding practices- MMF, MDD, and MAD- were positively associated with high yield rates of spices and cereals. The yield rate of cash crops, on the contrary, harmed child feeding practices. Production of pulses had a significant positive effect on MDD and MAD. Districts with high cereal yield rates ensured that children receive MMF and MAD. There is a significant spatial association between child feeding practices and malnutrition across Indian districts. The study suggests that adopting nutrient-sensitive agriculture may be the best approach to improving children's nutritional status. [ABSTRACT FROM AUTHOR]

The active participation of the central bank in exchange rate management has accelerated the growth of foreign exchange reserve in India. The massive reserve stockpiling has substantially contributed to apprehensions about excess liquidity in the domestic economy. The extent to which these concerns are justified depends on the degree to which the central bank is able to mitigate its effects on monetary aggregates. This study is an attempt to assess the magnitude of the sterilization coefficient by using quarterly data from 1996 to 2019. In order to estimate sterilization and offset coefficients, the study employed the two-stage least squares (2SLS) method under the theoretical framework of simultaneous equation modelling. The findings show that the reserve accumulation through central bank interventions puts pressure on money supply. However, the RBI sterilization policy was effective as the central bank was able to sterilize 93 percent of its interventions, while the offset coefficient was 72 percent during the period of study. The low value of the offset coefficient compared to the sterilization coefficient indicates a high degree of monetary policy independence in neutralizing the central bank's purchase interventions. Based on the findings, it can be recommended that policymakers should consider the sustainability of interventions and sterilization operations as the dual policy objectives of independent exchange rate management and monetary policy cannot be achieved in the presence of a high interest rate in an inflation-targeting regime. [ABSTRACT FROM AUTHOR]