This issue consists of three research papers. Ayanendu Sanyal, K Gayithri and
S Erappa, in the paper, “Indian Civil Servants Pension Liability Projections:
An Alternative Framework”, attempt to examine, with the help of a new framework, whether the recent central government pension reforms will be successful in the future or not. In order to introduce any type of reform in the pension system of an economy, the projection of pension expenditure over a time horizon under the existing system and the reformed system remains vital. The reform was targeted to contain the pension expenditure of the central government such that it can provide a pension for all. This paper predicts pension expenditure for 100 years for the old scheme and the current hybrid scheme, and compares the two. It also checks whether the liability is increasing or decreasing in the future in comparison to the present situation, and comments on the present scenario based on the present and future extent of the pension liability under the hybrid scheme.
Subhalaxmi Mohapatra and Padmaja Mishra, in the paper, “Composition of Public Expenditure on Health and Economic Growth: A Cointegration Analysis and Causality Testing”, examine the linkage between different components of public expenditure on health, i.e., capital and revenue expenditure, and economic growth in India, with the aim to derive conditions under which the change in the composition of public expenditure on health could lead to higher steady-state growth rate in the economy. An econometric analysis using the tests of panel cointegration and Granger causality was conducted by using two types of datasets, viz., (1) Time series data on all-India; and (2) Panel data on 16 major Indian states. The results of all-India level analysis suggested that there is a causal effect of Gross Domestic Product (GDP) on revenue expenditure on health both in the short run and long run. However, there was no effect of revenue expenditure on health on GDP either in the short run or in the long run. The results of panel data analysis suggested that Gross State Domestic Product (GSDP) causes revenue expenditure on health both in the short run and long run, while revenue expenditure on health causes GSDP only in the long run. However, no linkage between economic growth and capital expenditure on health was found either at all-India level or state level.
M Suresh and N A Khan, in the paper, “Trends and Tax Buoyancy in Corporation Tax in Pre- and Post-Liberalization Periods in India”, examine the trends and buoyancy in the growth of corporate income tax during the pre- and post-liberalization periods, using secondary data for the time period from 1980-81 to 2005-06. Substantial improvement in the growth of corporate income tax was observed in the post-liberalization period vis-a-vis pre-liberalization period. The buoyancy rates in relation to GDP, inflation and broad money supply were analyzed. The buoyancy of corporate income tax with respect to GDP, in the post-reform period showed improvement over the pre-reform period.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
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.
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.
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.