Working Paper No. 68 January, 2006
The changes in government policies are continuous to correct the ill effects of its earlier policies. In this study an attempt is made to examine the equity aspect due to reforms in the banking sector at sub-regional level in the state of Andhra Pradesh covering the period 1985 to 2004. The analysis indicates that the share of rural areas in number of branches, number of accounts, deposits and credit declined during pre and post liberalisation periods. Despite declining shares in most of the parameters especially those of credit and deposits, there is positive growth in both the periods. However, the growth of these parameters is more in urban areas. The distribution of credit among the sectors indicates that the share of agricultural sector in accounts and credit declined during pre and post liberalisation periods. The share of agricultural credit declined in all the regions during pre and post liberalisation periods. This is true with respect to credit and number of credit accounts. In the case of other sectors, the share in accounts and credit increased in both the periods. Though, the share in the agriculture sector declined in all the regions, per account credit increased in all the regions during both the periods. It may be concluded that liberalisation has increased inequalities. But the rate of increase in inequalities is arrested to a certain extent in the recent past. But if one looks at the growth of credit given to different sectors and growth of credit in rural and urban areas, one may not come to this kind of conclusion.