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Banking Sector Development and Economic Growth in India

Author

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  • Sasikanta Tripathy

    (Sasikanta Tripathy (corresponding author), Faculty, Department of Humanities, Social Science and Management, NIT, Jamshedpur 831 014, Jharkhand, India. E-mail: stripathy.iitkgp@gmail.com)

  • Rudra P. Pradhan

    (Rudra P. Pradhan, Assistant Professor, Vinod Gupta School of Management, Indian Institute of Technology Kharagpur, India. E-mail: rudrap@vgsom.iitkgp.ernet.in)

Abstract

This article investigates short-run as well as long-run relationships, and also causality relationships between banking sector development and the economic growth of India for which empirical analysis is performed using annual data. We use a new data set of banking sector development indicators to argue that banking sector development substantially affected economic growth. We find strong evidence that banking sector development caused economic growth in the Indian economy, especially in the period between 1960 and 2011, covering 52 years of the post-independence period for India.

Suggested Citation

  • Sasikanta Tripathy & Rudra P. Pradhan, 2014. "Banking Sector Development and Economic Growth in India," Global Business Review, International Management Institute, vol. 15(4), pages 767-776, December.
    • Handle: RePEc:sae:globus:v:15:y:2014:i:4:p:767-776
    DOI: 10.1177/0972150914543421
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    References listed on IDEAS

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    Cited by:

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    2. Shravani Sharma & Supran Kumar Sharma, 2019. "Evidence on Relationship Between Economic Growth and Financial Development of Selected Northern Indian States: Using Panel VEC Approach," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(4), pages 869-884, December.

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