Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractIndia's financial inclusion agenda has witnessed a paradigm shift over the last decade, away from an emphasis on credit to a more comprehensive approach toward financial services (e.g., opening bank accounts and offering basic financial products, such as insurance). This paper describes the structure of banking and microfinance institutions in India relevant to the developing model of financial inclusion, as well as relevant regulatory structure and modes of delivery. It explains the current state of financial inclusion, as well as regulatory changes necessary to make the new architecture for inclusion viable, including a critique of some of the recommendations of the Mor Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households. The paper then reviews modes of delivery and the regulatory structure being contemplated or recently introduced. It assesses the suitability objective envisaged as critical for inclusion, associated challenge of revamping consumer protection laws, and imperative of improving financial literacy. The paper also discusses the case of micro, small, and medium-sized enterprises in the given context.

Abstract. In recent years, several studies have attempted to explain the positive link between corporate investment and internal cash flows by hypothesizing the existence of asymmetric information. Managers know that the firm has high return investment opportunities, but the capital market does not. An alternative explanation for cash flow's relationship to investment is that managers have the discretion to use the company's cash flows to advance their own interests, and these are positively linked to the growth of the firm. The asymmetric information hypothesis predicts a positive relationship between investment and cash flow for firms with returns on investment above their costs of capital, the managerial discretion hypothesis predicts a positive relationship for firms with returns below their costs of capital. This paper presents evidence consistent with both hypotheses.

Infrastructure helps in building productive capacity by bridging connectivity gaps, reducing distribution and trade costs, and facilitating the sharing of the benefits of growth with poorer groups and communities, among others. The evidence in this paper suggests the need for India to develop both hard as well as soft infrastructure for enhancing trade flows and growth. The existence of both aspects simultaneously will produce gains of a significantly higher order but one without the other is likely to be ineffective.

The telecom sector has witnessed rapid changes in the last five years. There have been far-reaching developments in Information Technology (IT), consumer electronics and media industries across the globe. Convergence of both markets and technologies is a reality that is forcing realignment of the industry. At one level, telephone and broadcasting industries are entering each other's markets, while at another level, technology is blurring the difference between different conduit systems such as wireline and wireless. In the New Telecom Policy of 1999, the government recognized that provision of world class telecommunications infrastructure and information is the key to rapid economic and social development of the country. This will not only help in the development of the IT industry, but also provide for widespread spillover benefits to other sectors of the economy. A significant development in the telecom sector that will influence both market structure and technology is convergence. Convergence implies a need not only to consider the appropriate method of licensing and charging licence fee, but also forces the policy maker to review a number of other aspects, including whether to regulate and the nature and extent of regulation. The attempt of all the policy initiatives should be to promote the flexibility of technology choice and service provision. Thus, neutrality of policies towards technology/platform is seen as a desirable attribute, not only because this enhances opportunities but also because the policy maker is not in a position to anticipate the likely developments and fine-tune policy. Telecom policy reform was initiated in India in 1994. Although the reform process has been underway for more than five years with little to show by way of introduction of competition in the sector, there is awareness of the crucial issues that need to be addressed. Given the acknowledged importance of telecommunications to overall national interests, governments tend to get involved in the management of the sector's progress. Unfortunately in terms of development, the interests of the government and the private sector do not always reconcile easily—which has resulted in telecom stagnation in many countries, including India. Evidence shows that governments which most 'competently' foster private sector advancement of their telecommunications industries are best placed to gain world class telecommunications services and the attendant benefits. Arguably, early liberalization could give any country a first mover advantage in attaining high telecommunications performance. However, hasty adoption by developing economies of liberal franteworks adopted by developed economies could easily fail and in the process discredit the idea of liberalization. Enthusiasm for liberalization and its possibilities needs to be juxtaposed with a realistic transformation programme that takes into account the country's economic and political dynamics.