Educational Credit Interstate Disparities in India: An Empirical Analysis of Determinants

Abstract

The significance of higher education for a country's economic growth is substantial, as it contributes to individual development, societal improvement, and national development. This study aims to quantify the discrepancy in educational loans granted to individuals as part of priority sector lending by commercial banks from 2016 to 2021 using secondary data collected from Reserve Bank of India and All-India Survey on Higher Education. Further, pooled Ordinary Least Square regression model was applied to identify determinants of inter-state disparities in educational credit. According to the study's results, the paper recommends implementing a nationwide policy for fair and convenient distribution of educational credits to promote inclusive growth. The research establishes a clear link between the gross enrolment ratio and educational credit, suggesting that improving access to convenient credit assistance could motivate students to pursue higher education. Therefore, this study proposes facilitating easy access to credit specifically for educational purposes.