Financial Inclusion in India- “A Catalyst for Sustainable Economic Growth”
One of the biggest economic stories of our time is the reduction of poverty across the globe.A well developed financial system brings poor people into the mainstream of the economy and allows them to contribute actively towards personal economic growth. It has been rightly said by Franklin.D.Roosevelt “the test of our progress is not whether we add more to the abundance of those who have much, It is whether we provide enough for those who have little”.As the approach to12th five year plan (2012-2017) is faster, sustainable and more inclusive growth., the key to Inclusive growth is Financial Inclusion. It isemerging as the new paradigm of economic growth. Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups. The main focus of financial inclusion is to draw the unbanked population into formal financial system so that they have the opportunity to acess financial services ranging from savings ,payments transfers to credit and insurance. Though our country's economy is growing steadily, still the growth is not inclusive with the economic condition of the people in rural areas worsening.There has been many formidable challenges associated with financial inclusion such as bringing the gap between the sections of the scociety which are financially excluded within the ambit of formal financial system,providing financial literacy and strengthening credit delivery mechanism so as to invigorate economic growth.A nation can grow economically and socially if its weaker section can turn out to be financially independent. So an inclusive sectorshould not only serve the bankable clients, but also integrate the "unbankable"clients by making them "bankable".The present paper highlights the significance of financial inclusion in social and economic development of the society.The study focusses on the role of financial inclusion in strengthning India’s position in relation to other country’s economy and the efforts of RBI in achieving it.For analysing such facts, data has been compiled through secondary sources and articles. After analysing the facts and figures it has been concluded that financial inclusion plays a major role in driving away the poverty from the countrybut still there is a long road ahead to achieve the desired results . No doubt it is playing a significant role and is working in a positive direction.
Keywords: Financial Inclusion, Reserve Bank of India ,NABARD ,No- frills account
JEL Classification: G20, G21, G23