The stabilization and structural reform program in India was implemented against a background of incomplete structural transformation, widespread poverty, low level of human development and distorted pattern of expenditure on health and education oriented towards the relatively well-off sections of the society. The government has undertaken both stabilization and structural reforms as two components of the economic reform package since July 1991. Foreign Direct Investment (FDI) in India has grown immensely during the reform period due to strong support from the union government. Hence, it is worthwhile to examine why China is able to get more FDI than India despite her many relative advantages. One significant factor cited for the difference is the contrasting discretion in adopting policies of openness by the respective governments. GDP growth and poverty reduction that might occur following trade liberalization need not necessarily result in an improvement in the food security of the poor. Trade policy analysis should consider indicators of food security in addition to overall growth and poverty. Manufacturing growth in India during the post-reform period presents a somewhat mixed picture. Capacity additions through investments are critical for accelerating growth in Indian manufacturing industries.
The first paper, “Foreign Shareholding and Productivity Spillover: A Firm-Level Analysis of Indian Manufacturing”, by Pritish Kumar Sahu and Sakiru Adebola Solarin, examines the spillover from FDI in Indian manufacturing by using the firm-level data for the period 2000-2009 employing a Cobb-Douglas-type production function. The paper sheds light on the possible reason for positive spillover by analyzing some more factors of the present dataset. The main findings in the context of entire manufacturing demonstrate positive and marginal impact of FDI on productivity spillover of the domestic firms. Further, the findings put forward that the overall economic growth, growing domestic market, availability of low- cost labor, development in credit policy, increased expenditure on research and development, and more import of capital goods could be other possible reasons for the positive productivity spillover in the recent years.
The second paper, “Oil Discovery and Sectoral Performance in Nigeria: An Appraisal of the Dutch Disease”, by Ismail O Fasanya, Adegbemi B O Onakoya and Misbaudeen A Adabanija, attempts to examine the effect of oil discovery on sectoral performance in Nigeria, using the time series data from 1975 to 2010, based on the Dutch Disease hypothesis and combining several procedures in modern econometric estimation techniques. The main findings demonstrate that the discovery of oil in commercial quantity in Nigeria brought about changes in the sectoral performance, but a larger effect is observed in the agricultural sector. The study highlights that the government should give top priority to the agricultural sector through the provision of infrastructures, incentives in the form of subsidies, and general modernization of agricultural activities.
The third paper, “Relative Prices, Price Level and Inflation: Effects of Asymmetric and Sticky Adjustment”, by Shruti Tripathi and Ashima Goyal, studies the different ways in which relative price shocks affect the price level and then inflation, using Indian data. The authors opine that the asymmetry variable is a better measure of supply shocks than the traditional measures and also claim that the distribution-based measures of supply shocks perform better than the traditional measures, such as prices of energy and food. The study highlights that the estimated Calvo parameter implies that half of the Indian firms reset their prices in any period, while 66% of firms are forward looking in their price setting.
The last paper, “Trade Liberalization and Poverty: An Indian Perspective”, by N A Khan and Santanu Chowdhury, studies the effect of trade liberalization on poverty in India through regression analysis by using data for the period from 1980-81 to 2007-08. The authors state that a relationship does exist between trade liberalization and poverty. The results of the study also show that this relationship holds true even at the sectoral level, as there is a positive impact of exports of primary and manufacturing sectors on poverty reduction. They also claim that rural areas are benefited more from trade liberalization as compared to the urban areas. The study highlights that employment and purchasing power are the key factors in poverty reduction.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
