{"id":166595,"date":"2022-02-04T21:03:00","date_gmt":"2022-02-04T15:33:00","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=166595"},"modified":"2022-02-04T21:03:00","modified_gmt":"2022-02-04T15:33:00","slug":"answered-a-boost-to-financial-inclusion-can-accelerate-indias-growth-to-5-trillion-quickly-comment-also-highlight-the-initiatives-offered-by-our-government-for-this-purpose","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-a-boost-to-financial-inclusion-can-accelerate-indias-growth-to-5-trillion-quickly-comment-also-highlight-the-initiatives-offered-by-our-government-for-this-purpose\/","title":{"rendered":"[Answered] A boost to financial inclusion can accelerate India\u2019s growth to $5 trillion quickly. Comment. Also, highlight the initiatives offered by our Government for this purpose?"},"content":{"rendered":"<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><b><span data-contrast=\"auto\">Introduction<\/span><\/b><span data-contrast=\"auto\">: Define financial inclusion.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\"><br \/>\n<\/span><b><span data-contrast=\"auto\">Body:<\/span><\/b><span data-contrast=\"auto\"> Explain how a boost to financial inclusion can help India become a 5 trillion-dollar economy. Briefly mention the constraints in achieving financial inclusion. Write about initiatives taken by the government to improve financial inclusion.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\"><br \/>\n<\/span><b><span data-contrast=\"auto\">Conclusion:<\/span><\/b><span data-contrast=\"auto\"> Write about the benefit of financial inclusion apart from reaching target of 5 trillion-dollar economy.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-contrast=\"auto\">According to <\/span><b><span data-contrast=\"auto\">World Bank<\/span><\/b><span data-contrast=\"auto\">, Financial inclusion means that individuals and businesses have <\/span><b><span data-contrast=\"auto\">access to useful and affordable financial products and services<\/span><\/b><span data-contrast=\"auto\"> that meet their needs \u2013 transactions, payments, savings, credit and insurance \u2013 delivered in a responsible and sustainable way.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">India plans to become a 5 trillion economy and a global economic power house by 2024-2025. Financial inclusion is an important step towards the goal of a 5 trillion-dollar economy.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li><span data-contrast=\"auto\">Financial inclusion makes the <\/span><b><span data-contrast=\"auto\">development process more inclusive and participative<\/span><\/b><span data-contrast=\"auto\"> thereby raising the level of economic output and growth.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">It <\/span><b><span data-contrast=\"auto\">inculcates the habit of savings which leads to capital formation<\/span><\/b><span data-contrast=\"auto\">, providing a boost to economic growth.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Reduces cash in economy<\/span><\/b><span data-contrast=\"auto\">, thereby reducing tax evasion and role of black money.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Increased money in the banking system creates a multiplier effec<\/span><\/b><span data-contrast=\"auto\">t and propels economic growth,<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Availability of <\/span><b><span data-contrast=\"auto\">adequate and affordable credit fosters entrepreneurial spirit.<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Enables <\/span><b><span data-contrast=\"auto\">Direct Benefit Transfer (DBT), reducing government expenditure and leakages.<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Access to <\/span><b><span data-contrast=\"auto\">insurance products reduces the level of economic hardships<\/span><\/b><span data-contrast=\"auto\"> thus enabling more effective participation in the economy.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Increased level of <\/span><b><span data-contrast=\"auto\">financial inclusion enables tapping the capacity of rural masses.<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">However, financial inclusion is not an exclusive phenomenon, its achievement depends upon several factors. Thus, the following challenges should be tackled for optimum benefit from financial inclusion:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li><b><span data-contrast=\"auto\">Low levels of digital and financial literacy<\/span><\/b><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Regional disparity in financial inclusion<\/span><\/b><span data-contrast=\"auto\">, eastern and north eastern states lag behind in financial inclusion.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Urban rural divide,<\/span><\/b><span data-contrast=\"auto\"> majority of bank branches are in urban areas, whereas rural areas are underserved.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Lack of adequate infrastructure,<\/span><\/b><span data-contrast=\"auto\"> especially ICT infrastructure.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Socio economic constraints<\/span><\/b><span data-contrast=\"auto\"> like low-income level and exclusion of vulnerable section like women etc.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Inability to provide collateral<\/span><\/b><span data-contrast=\"auto\"> induces more reliance on informal sources of lending.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><b><span data-contrast=\"auto\">Government initiatives for financial inclusion<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">To address these challenges and propel India towards a 5 trillion-dollar economy the government has taken following initiatives for financial inclusion.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Banking reforms<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"2\"><span data-contrast=\"auto\">Announced in budget 2022, <\/span><b><span data-contrast=\"auto\">100% of 150,000 post offices<\/span><\/b><span data-contrast=\"auto\"> will be brought into the <\/span><b><span data-contrast=\"auto\">core banking system<\/span><\/b><span data-contrast=\"auto\"> with interoperability between post office accounts and bank accounts.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"2\"><b><span data-contrast=\"auto\">Increasing the number of Regional Rural Banks<\/span><\/b><span data-contrast=\"auto\"> to increase access.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"2\"><b><span data-contrast=\"auto\">Expanding the scope of Priority Sector Lending<\/span><\/b><span data-contrast=\"auto\"> to ensure affordable credit.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Promoting the <\/span><b><span data-contrast=\"auto\">engagement of banking correspondents<\/span><\/b><span data-contrast=\"auto\"> to enable doorstep delivery of banking services.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Promoting <\/span><b><span data-contrast=\"auto\">micro-finance institutions<\/span><\/b><span data-contrast=\"auto\"> to provide collateral free loans.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Government schemes like <\/span><b><span data-contrast=\"auto\">PM Mudra Yojana<\/span><\/b><span data-contrast=\"auto\"> and <\/span><b><span data-contrast=\"auto\">Stand-Up India<\/span><\/b><span data-contrast=\"auto\"> to ensure <\/span><b><span data-contrast=\"auto\">access to credit<\/span><\/b><span data-contrast=\"auto\"> to the underserved section of society.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">Government schemes for increasing insurance and pension coverage, <\/span><b><span data-contrast=\"auto\">PM Jeevan Jyoti Bima Yojana (PMJJBY), PM Suraksha Bima Yojana (PMSBY), PM Fasal Bima Yojana (PMFBY) and Atal Pension Yojana (APY).<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">National Strategy for financial inclusion by RBI <\/span><\/b><span data-contrast=\"auto\">and financial literacy programmes by RBI<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">DBT utilising JAM trinity reducing leakages and expenditure.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Expansion of Kisan Credit Card scheme<\/span><\/b><span data-contrast=\"auto\"> to cover animal husbandry and fishery.\u00a0\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Push for digital banking <\/span><\/b><span data-contrast=\"auto\">to reduce dependence on physical banks to ensure greater reach of banking services.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Increase in Financial Inclusion will not only help India achieve the target of 5 trillion economy quickly but also ensure that the benefits of this growth are distributed equitably.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction: Define financial inclusion. Body: Explain how a boost to financial inclusion can help India become a 5 trillion-dollar economy. Briefly mention the constraints in achieving financial inclusion. Write about initiatives taken by the government to improve financial inclusion. Conclusion: Write about the benefit of financial inclusion apart from reaching target of 5 trillion-dollar economy.\u00a0&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/answered-a-boost-to-financial-inclusion-can-accelerate-indias-growth-to-5-trillion-quickly-comment-also-highlight-the-initiatives-offered-by-our-government-for-this-purpose\/\">Continue reading <span class=\"screen-reader-text\">[Answered] A boost to financial inclusion can accelerate India\u2019s growth to $5 trillion quickly. Comment. Also, highlight the initiatives offered by our Government for this purpose?<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-166595","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/166595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=166595"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/166595\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=166595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}