Regional financial disparity in India: can it be measured? (JoIE Blog)
Anand, Prathivadi B
Anand, Prathivadi B
Publication Date
2024-01-01
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© 2024 The Authors. This work is distributed under the Creative Commons CC-BY license (https://creativecommons.org/licenses/by/4.0/)
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openAccess
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2024-04-05
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Abstract
Recent discussions on inequality have focused on increasing global income and wealth inequality between individuals, inequality between countries and inequality among different population groups within a country. Such disparities, whether in large or small countries, can lead to increased poverty in certain regions, skew intra-national migration patterns, could cause resource-based and inequality-based conflicts and militancy, and pose threats to national security in general. In the context of Sustainable Development Goals (SDGs), eliminating extreme poverty and hunger, reducing other forms of poverty, and promoting inclusive and sustainable human settlements are national policy priorities (SDGs 5 and 10).
In this study, we examine financial development at the sub-national level in the context of a large economy, India. As a large emerging economy, India is particularly an interesting case to examine as it is not only a large federal economy with sub-national units (states) at varying stages of development, but the ownership of its financial sector is also quite skewed and diverse. Our major research questions are: how do we measure the level of financial development at the sub-national level? How unequal is the financial development across the states? Does it vary by the ownership of financial institutions? Widening regional disparities including widening rural-urban gap has been observed in India especially since 1990s.This inequality has persisted across various socio-economic dimensions.
To explore the research questions, our study develops a banking development index at the sub-national level for three different bank groups - public, private and foreign for 25 Indian states covering 1996-2015.
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Citation
Arora R and Anand PB (2024) Regional financial disparity in India: can it be measured. (Summary of article published in JoIE on 12th May 2021). JoIE Blog (The official blog of the Journal of Institutional Economics). Posted 25th April 2024 at: https://joie-blog.net/regional-financial-disparity-in-india-can-it-be-measured.
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Blog post