Research and Publications

Press Release RBI Working Paper Series No. 10 Analytics of Food Inflation in India @Thangzason Sonna, Dr. Himanshu Joshi, Alice Sebastian and Upasana Sharma Abstract *Food inflation in India has remained stubborn in recent years. A number of proximate factors such as increasing demand particularly arising from higher rural wages, rising agricultural cost of production, changing consumption pattern favoring protein items, increases in minimum support prices (MSPs) and

Press Release RBI Working Paper Series No. 09 Business Cycles Approach to Dynamic Provisioning: An Indian Case Study @Tulasi Gopinath and Thangjam Rajeshwar Singh Abstract There is a broad consensus in the literature that the financial system is procyclical in nature. The procyclicality of the financial system accentuates the phases of booms and busts of the business cycle with severe spillover implications for the real economy. In the wake of the recent global financ

Press Release RBI Working Paper Series No. 08 A Financial Conditions Index for India @Anand Shankar 1Financial market variables contain information about the future state of the economy. Changes in financial variables often translate into changes in the real economy. Very often financial variables send contradictory signals to economic agents. Further, acute information asymmetry exists in financial markets especially around trigger events during times of crises. Brea

Press Release RBI Working Paper Series No. 07 Debt Sustainability at the State Level in India@Balbir Kaur, Atri Mukherjee, Neeraj Kumar and Anand Prakash Ekka Abstract *The debt position of the state governments in India, which deteriorated sharply between 1997-98 and 2003-04, has witnessed significant improvement since 2004-05, reflecting the impact of both favourable macroeconomic conditions and policy efforts by the Central and state governments. The debt sustainab

Press Release RBI Working Paper Series No. 06 Estimating Employment Elasticity of Growth for the Indian Economy@Sangita Misra and Anoop K Suresh Abstract 1This paper provides updated estimates on employment elasticity - both aggregate as well as sector specific - using a variety of approaches. The aggregate employment elasticity estimates for India have declined over the decades and vary from 0.18 (arc elasticity) to 0.20 (point elasticity) during the post reform per

Press Release RBI Working Paper Series No. 5 Impact of Real Exchange Rate Volatility on Use-Based Industrial Production in India @Alice Sebastian, Upasana Sharma, Thangzason Sonna and Dr. Himanshu Joshi Abstract 1Theoretically, it is assumed that exchange rate volatility increases risk and hence dampens economic activity through well identified channels. Internationally, there have been empirical evidences in this regard that lent support to the adverse effect of exch

Press Release RBI Working Paper Series No. 04 Quantifying the Cyclically Adjusted Fiscal Stance for India @Sangita Misra and Saurabh Ghosh Abstract Taking cue from recent debate in the literature, we attempt to disentangle cyclically adjusted fiscal balance (CAB) for India using methodology recommended by the IMF manual and a range of potential output estimates. Our results indicate that after initial success in containing CAB, it has increased considerably during the

Press Release RBI Working Paper Series No. 03 Re-emerging Stress in the Asset Quality of Indian Banks: Macro-Financial Linkages @Shashidhar M. Lokare Abstract 1In a bank-based economy, sound health of the banking system is an imperative for efficient financial intermediation in the context of overall development and financial stability. In the post- global crisis period, the Indian banking system, has suffered growing impairment of asset quality. This paper explores t

Press Release RBI Working Paper Series No. 2 Net Stable Funding Ratio – An Estimate for Scheduled Commercial Banks in India @P. Bhuyan & A.K. Srimany Abstract 1Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) are two new liquidity ratios introduced by Basel Committee on Banking Supervision (BCBS) to address the problem of liquidity in the aftermath of the crisis that began in 2007. While the LCR tells about resiliency of a bank in short term, NS

Press Release RBI Working Paper Series No. 01 Global Liquidity, Financialisation and Commodity Price Inflation @Kumar Rishabh and Somnath Sharma Abstract 1 We review the role of the factors, identified in the literature, behind the global commodity inflation, viz. emerging market demand, speculation led by financialisation and easy global liquidity. This paper contributes to the existing literature on the issue in two ways. First, following BIS (2011), the distinctio

Press Release RBI Working Paper Series No. 11 Non Deliverable Forward and Onshore Indian Rupee Market: A Study on Inter-linkages@Rajan Goyal, Rajeev Jain and Soumasree Tewari Abstract 1The study examines the inter-linkages of onshore segments of India’s foreign exchange market with Non-Deliverable Forwards (NDF) market for Indian rupee (INR) for a sample period of June 6, 2006 to April 3, 2013. The study period is divided into four sub-periods based on appreciating/de

Press Release RBI Working Paper Series No. 10 Net Interest Margin, Financial Crisis and Bank Behavior: Experience of Indian Banks @Tushar B. Das Abstract 1The global financial crisis that jeopardized the advanced economies is perceived to have had a limited impact on Indian banking system. However, the effect was so severe that the advanced economies are still struggling to achieve stability. In this paper, we attempted to analyze the impact of the financial crisis o

Press Release RBI Working Paper Series No. 09 Corporate Pricing Power, Inflation and IIP Growth: An Empirical Investigation @Angshuman Hait, Joice John, Abhiman Das and Anujit Mitra Abstract 1Pricing power measures the extent to which a business can pass on the increases in input costs to consumers through increases in the prices of finished goods. The corporate pricing power in India has declined since 2009-10:Q1. Production has also fallen sharply since 2010-11:Q3.

Press Release RBI Working Paper Series No. 08 Macroprudential Regulation and Bank Performance: Evidence from India @Saibal Ghosh Abstract: 1Employing data on Indian banks for 1992-2012, the article examines the impact of macroprudential measures on bank performance. First, it finds that state-owned banks tend to have lower profitability and soundness than their private counterparts. Next, it tests whether such differentials between state-owned and private banks are dr

Press Release RBI Working Paper Series No. 07 Size of Government Expenditure Multipliers in India: A Structural VAR Analysis @Rajeev Jain and Prabhat Kumar Abstract 1A structural vector autoregression (SVAR) framework has been used to estimate the size of government multiplier at the level of Central and the State governments in India. As a priori expected, capital outlay is found to be more growth inducing than the revenue expenditure. Since the revenue expenditure a

Press Release RBI Working Paper Series No. 06 An Empirical Analysis of the Relationship between WPI and PMI-Manufacturing Price Indices in India@Jeevan Kumar Khundrakpam and Asish Thomas George Abstract *Manufacturing Purchasing Managers Index (PMI) has been increasingly used by various central banks for assessing the direction and strength of economic activity. One of the sub-indices or component level information provided by PMI is that of industrial input and outp

Press Release RBI Working Paper Series No. 05 Persistence of Informal Credit in Rural India: Evidence from ‘All-India Debt and Investment Survey’ and Beyond @Narayan Chandra Pradhan Abstract *Rural credit markets in India is characterised by the coexistence of both formal and informal sources of finance and the market is fragmented. To discuss the informal rural credit issue and to maintain consistency with All India Debt and Investment Survey (AIDIS) data, this pape

Press Release RBI Working Paper Series No. 04 Financial Development and Monetary Policy Transmission Across FinancialMarkets: What Do Daily Data tell for India?1@Partha Ray and Edwin Prabu This paper seeks to address two questions In Indian context. First, what is the nature of integration among different segments of Indian financial markets? Second, what has been the influence of monetary policy on different segments of financial markets? As far as domestic financial

Press Release RBI Working Paper Series No. 03 Estimation of Counterfeit Currency Notes in India – Alternative Methodologies@Sanjoy Bose and Abhiman Das Abstract 1Alternative methodologies on estimation of counterfeit notes in the system, attempted by various countries, mostly pertain to proportions based on reported numbers vis-à-vis total figure on currency in circulation, which are having certain obvious limitations. As against, this paper suggests a probability mod

Press Release RBI Working Paper Series No. 02 Financial Structures and Economic Development in India: An Empirical Evaluation @Satyananda Sahoo "Finance is, as it were, the stomach of the country, from which all the other organs take their tone." - William Ewart Gladstone, 1858 Abstract 1The paper empirically evaluates the role of financial structures in economic development of India. An assessment of various indicators of financial development reveals that both the