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Article
Publication date: 15 January 2020

Atul Mehta and Joysankar Bhattacharya

The study aims to understand how various channels of financial sector development affect the income inequality across Indian states and whether the inequality widening or…

352

Abstract

Purpose

The study aims to understand how various channels of financial sector development affect the income inequality across Indian states and whether the inequality widening or narrowing hypothesis of financial development may be confirmed at a sub-national level.

Design/methodology/approach

Using state-wise annual data for the period from 1999-2000 to 2011-2012, a panel data analysis using generalised method of moments (GMM) estimator is conducted for a sample of 15 major Indian states.

Findings

The results confirm the inequality widening hypothesis of financial sector development in India. While each channel affects different section of the population in a different way, their overall effect on the income inequality remains unfavourable.

Originality/value

This paper is the first ever study to provide a comparative empirical evidence for the effect of each channel of financial development on the income inequality in India. The results provide significant insights to the policymakers, practitioners and academia in the financial sector with respect to the efficiency of each channel of financial development in bridging the gap between the poor and rich.

Details

Journal of Financial Economic Policy, vol. 12 no. 4
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 4 December 2017

Atul Mehta and Joysankar Bhattacharya

The purpose of this paper is to examine the direct (microcredit), medium-direct (bank credit), and indirect (through economic growth) effect of financial sector development (FSD…

496

Abstract

Purpose

The purpose of this paper is to examine the direct (microcredit), medium-direct (bank credit), and indirect (through economic growth) effect of financial sector development (FSD) on rural-urban consumption inequality (RUCI) in India using state-wise annual data from 1999-2000 to 2011-2012.

Design/methodology/approach

A panel data analysis for a sample of 15 major Indian states using the generalized method of moments estimators provides an empirical evidence for the direct (microcredit), medium-direct (bank credit), and indirect (economic growth) effect of FSD on RUCI.

Findings

FSD is pro-urban in India resulting in a declining rural-urban consumption ratio (RUCR) and increasing RUCI. The negative effect of FSD on RUCR is greatest through the medium-direct channel followed by the indirect and direct channels.

Research limitations/implications

The study questions the social banking initiatives of the government in rural areas where more than 80 percent of the poor reside. There is a need for restructuring financial inclusion programs with a shift in their focus on rural areas and an improved mechanism to target the poor.

Originality/value

The paper proposes that formal financial services by banks are primarily availed by non-poor and urban population and hence acts as a medium-direct channel whereas the semi-formal financial services by microfinance institutions specifically target the rural poor and act as a direct channel to affect the poor. It is the first ever study to use state-wise data on microcredit disbursed under Self-help Group Bank Linkage Program to assess the direct impact of FSD on RUCI.

Details

International Journal of Social Economics, vol. 44 no. 12
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 11 June 2024

Tapas Sengupta and Dipayan Datta Chaudhuri

The network capacity deployed to manage the busy hour (or peak-hour) traffic remains underused during the nonbusy (off-peak) hours. Transferring some traffic from peak-hour to…

51

Abstract

Purpose

The network capacity deployed to manage the busy hour (or peak-hour) traffic remains underused during the nonbusy (off-peak) hours. Transferring some traffic from peak-hour to off-peak hours is likely to improve the utilization of network resources during the off-peak hours. This paper aims to examine whether diverting traffic from peak-hour to off-peak hours is possible by adopting the differential pricing policy.

Design/methodology/approach

The peak-load pricing theory suggests that the policy of differential pricing is socially optimal when there is peak demand for a particular duration and then there is off-peak demand. In this study, hourly traffic data from both peak and off-peak periods were collected from the Indian telecom service provider, “Aircel.” The paper analyzed the disparity in traffic between peak and off-peak hours using the nonparametric Tukey’s test. An experiment was also conducted to analyze whether a significant shift in telecom traffic occurs from the peak to the off-peak period when a price discount is applied during the off-peak period.

Findings

Statistically significant differences were observed in network traffic between peak-hour and off-peak hours. The network utilization of the telecom service provider Aircel was notably lower, particularly during the off-peak hours. The experiment demonstrated a high degree of price sensitivity among telecom service subscribers. Telecom Regulatory Authority of India (TRAI) has not considered network utilization of telecom service providers as a key performance indicator. Based on the outcomes of the study, this paper recommends that TRAI should adopt a more proactive approach by encouraging telecom service providers to follow the policy of differential pricing to enhance utilization of their network capacity.

Originality/value

To the best of the authors’ knowledge, this is the first paper to explore the issue of pricing as a tool for bringing about more uniform movement of telecom traffic, thereby enhancing network utilization within India’s telecommunications sector.

Details

Digital Policy, Regulation and Governance, vol. 26 no. 6
Type: Research Article
ISSN: 2398-5038

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