Role of Financial Inclusion in Promoting Inclusive Growth

Abstract

Abstract

India is on the verge of seeing a new economic dawn. It has already surpassed China as the fastest growing economy in the world. It has maintained a steady growth rate of 7% for the past two decades. The major propellers of this tremendous growth are – a liberal economy, demographic dividend and a booming service industry. The growth of Indian economy shows little sign of abating. IMF projects India’s growth rate at 7.5% for the year 2016. Within the next 15 years, the workforce in India will be the largest and among the youngest in the world. To cater to the growing number of workforces, an equal number of jobs will have to be created for an estimated one hundred million Indians who would join the labour market in the next decade. All these indicators combined with “Make in India” campaign signal towards stellar economic growth of India. However, high economic disparity has only accentuated the need for making this growth “inclusive”. According to a report of Rangarajan Committee, the poverty level in India in 2011-12 was about 29.5%.  Such a high level of poverty goes on further to emphasise the need for inclusive growth. Planning Commission of India has defined Inclusive growth as, “a growth process which yields broad-based benefits and ensures equality of opportunity for all”. Accordingly, the Commission enumerates the components of inclusive growth as – access to health and education services especially among the poor, equal employment opportunities and reduction of poverty levels. There is a need for resource generation and mobilization in order to meet the goal of inclusive growth. This, in turn, can be ensured by financial inclusion as access to finance by the poor and underprivileged groups can be a catalyst for reducing poverty and increasing social cohesion. It is in this context that the government has started various social schemes such as MNREGS, PMJDY, Atal Pension Yojana etc. The aim of this paper is to focus on the role played by financial inclusion in enhancing inclusive growth in the country. The paper cites government schemes like MNREGS &PMJDY for conveying this idea.

Keywords - Inclusive growth, financial inclusion, socio-economic development PMJDY, Swavalamban, SHGs

Cite this Article

Misbah Jahan, Mamta MohanRole of Financial Inclusion in Promoting Inclusive Growth. E-Commerce for Future & Trends. 2019; 6(2): 34–40p.