Indian Journal of Economics and Finance

Journal Information
EISSN: 25829378
Total articles ≅ 17

Latest articles in this journal

Al Zyood Mahmoud M. Al Zyood
Indian Journal of Economics and Finance, Volume 2, pp 21-24; https://doi.org/10.54105/ijef.d2521.111422

Abstract:
Non-performing loans (NPLs) have become increasingly worrying to the Saudi banking sector. Sanctioned loans have a repayment schedule, including principal and interest amounts. Excessive defaults on loans leads to a liquidity crisis throughout the banking sector, and can even cause bank failure. As a result, banks have to cover non-performing loans and maintain reserves under the instructions of the Saudi Arabia Central Bank, which severely affects profitability. This study analyzes the comparative position of non-performing loans in the Saudi banking sector over the period 2009-2017 to determine causes and impacts on bank profitability, using data from annual reports. The study variables are profitability (ROA and ROE) as the dependent variable, and non-performing loans ratio (NPLR) as the independent variable. The data was analyzed by correlation, regression, and analysis of variance (ANOVA) using SPSS. The empirical results represent that NBLR has a negative influence on the dependent variable.
Indian Journal of Economics and Finance, Volume 2, pp 57-63; https://doi.org/10.54105/ijef.b2533.112222

Abstract:
Gold remains a dynamic investment tool in many economies and is considered a safe- haven during times of crises. The sheer size of the US economy and hence any monetary policy decisions have implications for the global economy and global assets. Since commodities are priced in the US dollar, transmission of shocks to asset prices is bound to happen as investors rebalance portfolio. Now, the direction of movement in gold prices depends on other factors as well. Against this backdrop, we examine the impact of US monetary policy on gold prices in India and try to examine how monetary policy announcements during the pandemic by the Fed has influenced domestic gold prices. Further, we investigate the determinants of domestic gold prices using an ARDL model and find that prices have moved closely with global economic policy uncertainty, thereby demonstrating its safe haven feature and have risen with domestic CPI inflation, thus proving to be an inflation hedge. Thus, the study is expected to upgrade the understanding on the behaviour of investors towards gold, and information processing under uncertainty. JEL Classification: G10, G15.
Indian Journal of Economics and Finance, Volume 2, pp 45-56; https://doi.org/10.54105/ijef.b2531.112222

Abstract:
In a first of its kind, this paper tries to explore the relationship between investors sentiment and BSE Sensex return over the period January 2010 to December 2021 and under different market and economic conditions. Design/Methodology/Approach: The paper uses 32 market and macroeconomic variables as proxy to the investor sentiment. Principal component analysis has been used and the first 11 principal components with eigenvalue more than 1, have been selected to create investor sentiment sub-indices. Weighted/generalized least squares (GLS) method has been used to achieve the objectives of the study. Findings: We find that the impact of sentiment was significantly positive on portfolio return over the period of study. Furter, the slope of fivesentiment sub-indices increased in the boom period and the slope of two sub-indices increased significantly in the bull period. Research Implications: Findings of the study are helpful for retail investors, policy makers and other decision makers in the Indian stock market. Results are helpful for retail investors as guidelines for decision making and; also, they learn about the association between sentiment and portfolio return under different economic and market conditions. Originality/Value: The study contributes to the existing literature by exploring the relationship of sentiment and portfolio return in the Indian stock marketover different economic and market conditions.
Indian Journal of Economics and Finance, Volume 2, pp 39-44; https://doi.org/10.54105/ijef.b2530.112222

Abstract:
Precipitation is an economic indicator for the Indian economy. Because more than half of the Indian population is engaged in agriculture, and they depend on rainfall for their farming activities, along with farming, other sectors like manufacturing, transportation, banking, construction, and others are directly or indirectly affected by rainfall. The proposed study attempts to establish a relationship between the changes in rainfall and the GDP growth rate. The study demonstrates the opportunity and feasibility of introducing rainfall index-based derivatives in the Indian weather risk market. The study considered the average annual rainfall data of all 36 meteorological subdivisions and the GDP annual growth rate for the period from 1961 to 2020. The study performed simple correlation and regression with the SPSS software. The results of the correlation matrix show that there is a positive relationship between the selected two variables. According to the regression analysis, rainfall has a significant positive effect on India's GDP growth rate. This result shows that there is a need for rainfall index based derivatives in the Indian weather risk market to absorb the rainfall risk. The purpose of this paper is to suggest a new kind of versatile tool to overcome the rainfall risk. Rainfall risk is covered by traditional insurance, index insurance, and reinsurance. However, all of them failed to effectively manage the rainfall risk. So, right now, rainfall derivatives are needed to make a full-fledged rainfall risk market.
, Naba Raj Upadhyaya, International Relations Student at the Tribhuvan University of Nepal
Indian Journal of Economics and Finance, Volume 2, pp 25-33; https://doi.org/10.54105/ijef.b2523.112222

Abstract:
This paper deals with remittance and the economic growth of Nepal. Remittance is a significant source of the Nepalese economy. It is one of the critical sectors, and it has directly related to the immigration of people. This study aims to identify the relationship between Nepal's migration, remittance, and the economic growth. This paper is based on secondary sources of information. The Granger causality test examines the causality between remittance and economic growth of Nepal. The result of the Granger causality test shows that both the Nepalese people's entry and exit from the country are significant for the economic growth of Nepal. The remittance received from migrated people is significant for the economic growth of Nepal. The contribution of remittance to GDP has increased, and the poverty level has decreased over the years. The education sector has improved, and the development level is gradually increasing. Therefore, there is an urgent need for policies with a high priority on national interests for managing international migration (both emigration and immigration) and remittance. This implies that the policy maker should implement an appropriate policy to invest in capital formation. It may be conducive to the economic growth of Nepal.
Rajat Rana
Indian Journal of Economics and Finance, Volume 1, pp 12-20; https://doi.org/10.54105/ijef.d2519.111422

Abstract:
Since the pandemic pushed the economy to its knees, India's youth population has been fueling a boom in the country's investing environment, with millions of people switching to stock trading. Millennials in the country have been slowly buying equities, mirroring trends found in the United States and other major economies, as salary cuts, job losses, economic troubles, and increasing time at home have prompted the search for new sources of income. CDSL (Central Depositories Services I Ltd), one of India's main securities depositories, reported a near 20% increase in new accounts in the six months after India imposed its first wave of coronavirus lockdowns, totaling more than 2.5 crores.
Indian Journal of Economics and Finance, Volume 1, pp 9-11; https://doi.org/10.54105/ijef.c2512.111422

Abstract:
The Indian government's three-decade-old economic reforms altered the terrain of various sectors of the Indian economy. The banking sector was no exception. As a result of reforms, this industry has seen significant changes. The banking sector plays vital role because it provides one of the most critical services for a developing economy. India is one of the largest economy in the world and its US$ 2.52 trillion1 banking industry is the backbone of the Indian economy. The sector recovered well from global financial crisis and demonstrated its resilience when the industrialized economies were affected. The banking sector in India is booming, thanks to the government's efforts to increase financial inclusion. Today service sector contributes half to Indian GDP and banking makes up chunk of it. India must continue to exploit the growth of banking sector which will help in achieving the distant goal of becoming a developed economy.
Indian Journal of Economics and Finance, Volume 1, pp 1-8; https://doi.org/10.54105/ijef.d2516.111422

Abstract:
In this study, we will analyze the impact of lockdown on stock returns of airline industry in India. For this purpose, market model of event study methodology is used. The event window of 21 days have been taken to show the impact on stock returns due to announcement of lockdown. We will also understand how investors react at the time of fall in the stock market in terms of one industry and the impacts of lockdown in the economy of India. We will investigate into the impact of the first lockdown on returns, abnormal returns and cumulative abnormal returns for all three companies of the airline sector viz., GLOBALVECT.BO, SPICEJET.BO and INDIGO.BO. Data for this research was obtained from the official website of National Stock Exchange (NSE) . Conclusions were drawn based on this data and it was found that the lockdown had a more significant impact on abnormal returns of Indigo compared to that of Spice Jet and Global Vectra. Further, it can be inferred that the impact of lockdown on the average abnormal return and the cumulative average abnormal returns of the airline sector was highly significant, which displayed more volatility in stock prices.
Shankar Ravichandran, Mandira Roy
Indian Journal of Economics and Finance, Volume 2, pp 34-38; https://doi.org/10.54105/ijef.b2526.112222

Abstract:
Climate change (CC) is a burning issue in the contemporary situation. All nations should be concerned about this, and it must be addressed right away. Additionally, greater funding is required to discourse this issue. Green finance becomes a global issue in sustainable economic and financial growth. Green finance refers to the financial arrangements that are specifically used to fund ecologically viable plans or projects that incorporate the features of climate change. Member nations of the Kyoto Protocol, which was endorsed on December 11, 1997, gave it a top priority. These initiatives fall under the categories of "green financing," "waste processing and recycling," "biodiversity protection," "climate change adaptation," etc. In addition to helping India and poor nations to achieve the Sustainable Development Goals (SDGs), green financing may help them raise money to fulfill their Nationally Determined Contribution (NDC) obligations under the Paris Agreement. Greening the industry through finance will lead to eco-sound results, ultimately leading to the green growth of the nations. Different countries can adopt green financing in a variety of methods and with varying legislation. In India, CSR was deemed necessary for NBFCs and SCBs by 2007. NAPCC was established in 2008 to adopt and mitigate the climate change policy. In the Union Budget of 2022, Finance Minister has announced the issuance of sovereign green bonds during the upcoming fiscal year. SGBs could potentially mobilize additional financial resources to support India's commitment to achieving net-zero carbon emissions by 2070. The issuance of sovereign green bonds is a baby step toward directing private capital flows toward environmentally beneficial public projects. Other government programs aimed at preventing climate change and developing a low-carbon economy may receive funding from green financing.
Indian Journal of Economics and Finance, Volume 1, pp 17-23; https://doi.org/10.54105/ijef.c2517.051322

Abstract:
Fiscal consolidation methods have always been under lens since their origin with newer and more stringent way of monitoring them. Still the elected policymakers tend to find a way to manage them so as to not to lose the externality benefits of higher fiscal deficits in term of electoral gains. This paper analyses the fiscal adjustment programme adopted by the central government of India since the inception of FRBM act 2003. A comparison of the consequences of fiscal adjustment on public finance under discretionary phase of economic reforms with the initial rule phase has also been discussed in this paper. Analysis indicates that fiscal reforms has led to consolidation of public finances in India but some crucial challenges remain i) setting up of Fiscal Council ii) not to use creative accounting to maneuver accounts to meet the fiscal targets iii) implementing countercyclical fiscal policy in totality and iv) starting a countercyclical fund. JEL Classification: E 62, E 60
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