Agricultural Economics Research Review
Year : 2021, Volume : 34, Issue : conf
First page : ( 196) Last page : ( 196)
Print ISSN : 0971-3441. Online ISSN : 0974-0279.

Does commercial banks credit to agriculture and industry can raise per capita net state domestic product of India? a regional panel data analysis

Datta Kanchan*

University of North Bengal, Jalpaiguri, 735 101

*Corresponding author: kanchandatta_72@nbu.ac.in

Online Published on 16 March, 2022.

Abstract

Bank credit to agriculture and industry plays a pivotal role in economic growth. It may stimulate the capital accumulation and rate of saving that further induce economic growth. However, there is no unanimous opinion on the relationship between bank credit to agriculture and industry, and economic growth. An attempt has been made to investigate the role of bank credit to agriculture and industry, and capital outlay on the per capita net state domestic product of India. To investigate such a relationship this study uses panel data regression techniques on different regions of India using the data from statistical handbook on Indian Economy published by RBI. The study finds that the fixed effect model is better than the random effect model and expansion of commercial banks credit to agriculture significantly and positively influences the per capita net state domestic product. Banks credit to the industry and capital outlay are not playing any significant role in stimulating per capita net state domestic product in various regions of India.

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