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2755 items in total found

Working Papers | 2022

State-owned banks and credit allocation in India: Evidence from an asset quality review

Abhiman Das, Sanket Mohapatra, and Akshita Nigania

This paper examines the role of state-owned banks' presence in allocation of credit to different sectors in India using the central banks Asset Quality Review (AQR) as a quasi-natural experiment. The AQR resulted in a larger increase in non-performing loans of state-owned banks as compared to other banks. We exploit the heterogeneity in the presence of state-owned and other banks across districts to identify the supply side channels for bank credit reallocation. Using a difference-in-differences analysis, we find that the top-third of districts based on presence of state-owned banks branches experienced a higher fall in the share of credit to the industrial sector in the post-AQR period compared to other districts. Such districts also experienced a greater increase in retail loans, which are considered less risky compared to industrial loans. Further, an analysis using a panel vector autoregression finds that the AQR, through an increase in non-performing loans of state-owned banks, led to a decrease in economic growth at the district-level. The results of this study suggest that central bank policy reforms can influence bank credit allocation at the sub national level and have real economy effects.

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Working Papers | 2022

Impact of Mergers and Acquisitions on Innovation: Evidence from a Panel of Indian Pharmaceutical Firms

Rakesh Basant and Neha Jaiswal

Based on the literature, the paper identifies processes that get initiated post an M&A event and affect the acquiring firm's innovation efforts. We apply panel fixed effects estimation techniques to analyze the individual impact of mergers and acquisitions on R&D intensity of acquiring firms using data for 217 publically listed Indian pharmaceutical firms (both acquirers and non-acquirers) during 1999-2018. The study finds that acquisitions rather than mergers provide impetus to R&D in the acquiring firms. This suggests that these two combinations-mergers and acquisitions - do not unleash the same type of innovation activity related processes in the acquiring firm. Results also show that when mergers or acquisitions are combined with purchase of assets, they have a positive impact on R&D intensity. Purchase of assets when combined with M&A seem to provide access to relevant complementary assets that makes R&D activity profitable for the acquirer post the merger or acquisition event. Possibly, firms view purchase of assets as a strategy that is complementary to M&A strategies for enhancing innovation. The paper shows that impact of M&A on R&D takes time and it is useful to analyze the impact of mergers and acquisitions separately, rather than combining the two together.

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Working Papers | 2021

Insolvency set offs in India: A comparative perspective

M P Ram Mohan & Vishakha Raj

The overarching objective of the Insolvency and Bankruptcy Code, 2016 (IBC) is to foster rescue culture in India and facilitate the reorganization, restoration and resolution of the corporate debtor rather than its liquidation. However, liquidation has been the most prevalent outcome so far for corporate debtors who have entered into the insolvency resolution process. The liquidation process under the IBC entails an orderly distribution of sale proceeds of the liquidation estate or the unsold assets of the corporate debtor where each creditor receives a proportionate amount of their claims based on their place in the distribution hierarchy of the liquidation process. A creditor’s ability to set off a debt by-passes this orderly scheme of distribution and allows the creditor exercising the set off to be preferred over others to the extent of the set off value. Despite this manifestation of the right to set off, it is preserved in the insolvency and bankruptcy regimes of the US and the UK, the latter making it mandatory. India recognized set offs under insolvency law prior to the enactment of the IBC. After the IBC’s enactment, an indebted creditor’s right to set off during the insolvency resolution process has become ambiguous. The IBC’s protective moratorium during the insolvency resolution process has been used to deny indebted creditors of their ability to exercise set offs against the corporate debtor. This paper analyses the evolution in the Indian position on insolvency set offs and compares it with the treatment of set offs in the UK and the US. The paper finds that set offs are not inherently antithetical to insolvency law and that they can be embraced by the IBC.

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Working Papers | 2021

Exploring Gender Perceptions of Nuclear Energy in India

Mini Govindan and M.P. Ram Mohan

There are numerous studies that have examined the role of gender on differential perceptions on various aspects of energy, including those related to nuclear plants. Yet, few studies have explored the role of changing perceptions and the interaction of conditional factors in shaping the gendered effects, especially from a developing country. This enquiry is critical for the administrative state to understand targeted policy prescriptions. This paper examines the differences in perceptions and related reactions of both men and women living in the vicinity of Kakrapar Atomic Power Station in the Indian state of Gujarat. Although women's disproportionate sensitivity to and lower tolerance of risks is embedded in the broad cultural milieu, the presence of the nuclear plant in their vicinity was not perceived as a larger risk than the possible flooding from the nearby dam or losing livelihood opportunities due to dwindling returns from agriculture. This study challenges the gendered binary thinking in nuclear energy domain in terms of engagement and administration of nuclear energy projects.

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Working Papers | 2021

Intellectual Property licenses in cross-border insolvency: Lessons from In Re Qimonda

M.P. Ram Mohan and Aditya Gupta

Introduced in 2016, the Insolvency and Bankruptcy Code overhauled the Indian insolvency regime. Five years young, the work in progress Code is now in the process of adopting the Cross-Border insolvency, which was omitted from its original mandate. In 2018, a legislatively appointed committee suggested that the Code should adopt the UNCITRAL Model Law on Cross Border Insolvency. However, the Committee overlooked a crucial jurisprudential guideline, which coloured the interpretation of the Model Law, which was delivered in a cross-border insolvency dispute between American and German regimes. An American bankruptcy court subjected the German administration of American Intellectual Property assets to a protection exclusively available within the American Bankruptcy Code. This paper studies the American judicial decisions in the Samsung v. Jaffe dispute to identify and underline the importance of its directive. The study reveals that there is virtually no guidance on how an intellectual property license is treated within the Indian insolvency regime. The authors underline the importance of such guidance considering the proposed adoption of the Model Law and suggest legislative inquiry in the issue.

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Working Papers | 2021

Modelling the impact of Ovulatory Cycle Knowledge on the number of children and age of women at first birth

Karan Babbar and Pritha Dev

This study tries to bridge the gap by establishing the causal impact of ovulatory cycle knowledge (OCK) on the number of children and months to the first birth. We have analysed the data of 459957 women aged 15 to 34 using the Indian Demographic Health Survey. Our results establish a causal link and show that OCK is significantly and negatively associated with the number of children and months to the first birth. Governments and policymakers should focus on interventions targeting behavioural change to improve the OCK, especially for girls from disadvantaged socio-economic backgrounds.

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Working Papers | 2021

COVID-19 and Period Products Usage among Menstruating Women in Urban and Rural India

Karan Babbar and Pritha Dev

This paper estimates the impact of the lockdown across various zones on the period product consumption for menstruating women in India. We have used the national-level panel data from the CMIE's Consumer Pyramids Household Survey (CPHS) database across 510 districts of India, along with the lockdown zones data. Our study uses a robust strategy to exploit the temporal and spatial variation of the lockdown by using difference-in-difference estimates on period products expenditure. Our results show reduction of 27% in period products consumption in red zone districts compared to the green zone districts. There is a strong need to create robust infrastructure to ensure delivery of period products, especially during emergencies.

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Working Papers | 2021

Gold is Old:
Noble Metal in Indian Economy through Ages

Satish Y. Deodhar

For millennia, gold is considered auspicious in India and consumers have a fascination for possessing gold, gold jewellery, and gold coins. In this paper I document the sacredness associated with gold, the ancient Indian references to gold jewellery, availability and technology of extracting gold in those times, minting of gold coins and its function as a medium of exchange and store of value, and accumulation of gold stock due to favourable trade with the Occident in the common era. I draw attention to Indian obsession with gold in modern times, when none is produced domestically and it contributing negatively to India's external account. The gargantuan stock of about 24,245 tonnes of gold in India has to be considered as accumulated hoardings and not accumulated savings. Along with increasing the propensity of flow of savings going into financial markets and not in physical gold; suggestions are made to popularize and improve implementation of gold monetization scheme (GMS). This will re-channel idle stock of gold into financial markets and reduce deficit on the external account.

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Working Papers | 2021

Right to Research and Copyright Law: From Photocopying to Shadow Libraries

M.P. Ram Mohan and Aditya Gupta

Academic research and publishing are facing a crisis. The importance of access to academic literature in an interconnected world, the ever-growing cost of subscriptions to this literature, different revenue models of journals, and reducing or stagnant library budgets are pushing research and the academic community to find alternatives for academic research and publications. In its 25 years of existence, the open access movement and models which sought to contain the crisis have become the subject of considerable criticism. At the same time, a significant portion of academic literature remains locked behind steep paywalls. This has led to the growth of pirate websites and shadow libraries which have been met with forceful legal retribution by the publishers using Copyright laws. Using the Sci-Hub case, which is currently facing copyright infringement by a group of publishers before the Delhi High Court, the article evaluates the Open Access Movement, fair dealing in copyright law, academic piracy, and courts cases in the United States, India, and other countries, within the broad meaning of the right to research. The paper concludes that the purposive interpretation of the Copyright Law may have an answer enabling a just outcome.

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Working Papers | 2021

Targeted interventions: Consumption dynamics and distributional effects

Anindya S. Chakrabarti, Abinash Mishra, and Mohsen Mohaghegh

Income distribution-based targeted interventions are quite common in developing economies. However, often due to institutional frictions, identification of the recipients happens at a lower frequency than the frequency of movement across income groups, leading to mis-identification of true and false recipients. What are the general equilibrium effects of such interventions? To measure the effects, we develop a heterogeneous agent production economy where agents face uninsurable income risks and we calibrate it to a novel panel dataset on monthly household income and consumption in India. We study the effects of persistent (identity-based) shocks as opposed to the usual temporary (income-based) income shocks, the difference being that in persistent payments individuals are guaranteed a payment across periods, regardless of their income status in future. We find that temporary interventions have muted distributional effects, while identity-based stimulus of the same size give rise to more prominent effects. In particular, a persistent income shock to the poorest decile equivalent to 0.6% of GDP leads to a 0.543% increase in consumption.

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