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The purpose of this study is to propose a model of competition between a formal lender (bank) and an informal lender (moneylender) with informational asymmetry between these two lenders. Further, the authors introduce capacity constraint on the lending capacity of the moneylender and assume that borrowers differ in risk and wealth.

The solution concept of Nash equilibrium has been used to derive the optimal strategies of the lenders.

The equilibrium strategies in most of the results depend on the difference between the expected returns from risky and safe projects where the risky project has higher expected returns. The credit market is segmented in terms of risk and wealth levels. Rationing of poor safe borrowers from the credit market is inevitable when the moneylender's capacity is sufficiently small, suggesting a low-income trap for them. Further, when moneylender has capacity constraint of some form, a zero-profit outcome is never a Nash equilibrium outcome.

There is a possibility of collusion between the lenders. However, the authors do not derive all possible outcomes under capacity constraint

When the informal lender has limited capacity, competition between formal and informal lenders may not alleviate credit rationing, instead aggravate the problem. Thus, the government should devise policies to ensure credit availability to resource poor households

While the literature models strategic interaction between lenders under the assumption of zero-profit (Bertrand Paradox) condition, this study shows that zero profit is not the only outcome under such a set-up. Also, in presence of capacity constraint of the moneylender, a zero-profit outcome is never a Nash equilibrium outcome for the lenders. There is an optimal contract at which the lenders differentiate in terms of repayment and collateral and earn positive profits under certain conditions.

Non-farm employment has transitioned from a residual to a dominant livelihood option in rural India. Despite the sector’s diverse welfare implications, it is still a male-dominant sector with limited scope for female’s participation. Several socio-economic and cultural factors are responsible for such disparities in occupational choices. The purpose of this study is to examine this gender dimension of occupational diversification for rural India and focuses on the role of education, caste and land ownership in explaining employment probabilities across gender.

This study uses secondary data on employment and unemployment from the National Sample Survey Office (NSSO) for rural India and pooled the data for three periods that include 61st (2004–2005), 66th (2009–2010) and 68th (2011–2012) round comprising a total of 235,722 individuals. The study applies a multinomial logit regression model.

The results show that education facilitates females to diversify to sectors like manufacturing, mining and construction while educated males are more likely to diversify to services. However, the likelihood of diversification by educated females is low for those belonging to land-owning households. On the contrary, land ownership facilitates educated males to join sectors like mining and quarrying and services. It is also found that females belonging to Scheduled Tribe/Scheduled Caste (ST/SC) households diversify to low return activities like manufacturing and construction while males are more likely to join services.

This study has contributed to the literature on employment diversification by considering not only the gender aspect of diversification but also examining how education, caste and land would explain occupational choices between males and females. It is evident from the findings that education can be a liberating factor for females to participate actively in sectors outside agriculture but the status quo associated with land ownership in rural India declines their possibility of economic participation compared to males. Even educated females are confined to manufacturing and construction in the absence of proper non-farm employment opportunities for them.

Over the past 25 years, direct cash transfers (often abbreviated as direct benefit transfer, DBT) to the poorer section of the society are gaining popularity over explicit subsidization of prices of essential commodities. One of the main arguments in favor of DBT is that it will cost the government less money and yet, the consumer benefit will be high. This paper aims to examine the proposition critically. Removal of price support exposes the consumers to market risk, and any income support programme must compensate the consumers accordingly.

The authors use a theoretical study where the model of a representative consumer under different specification of preferences is used to compare programme costs under price stabilization and income support programmes.

What the authors show in the paper that the comparative cost of the programmes crucially depends on the nature of preferences, as well as the good under question. For certain specifications of the indirect utility function and the marginal utility of money, one programme may cost less than the other. Any policymaker must take account of such nuances before making a blanket prescription.

The main limitation is that only a representative consumer is taken.

The specification of indirect utility function plays a decisive role in deciding, which one these two policies, DBT or stabilizing price at a fixed level.

The main novelty of the paper is in the different specifications of the indirect utility function considered in the paper.