Abstract:
The importance of financial services for economic growth has been well discussed in the literature both theoretically as well as empirically. Thus an inclusive financial system can be considered necessary for inclusive growth in an economy. Several policies have been initiated by the Government of India to improve financial inclusion in the country. This paper examines the state of financial inclusion(FI) in India by constructing a comprehensive index that incorporates both commercial and cooperative banks where the latter institution has been ignored in the literature. We also demarcate between the rural and urban regions, which has not been done in the literature. Our results show that some economically better-off states such as Himachal Pradesh, Goa, and Karnataka have done well in FI, but the rural-urban financial inclusion gap is increasing for several states. While Access has increased significantly after Jan Dhan Yojana, usage still needs to show much-needed improvement. Running a panel data regression by incorporating our constructed indices and juxtaposing data on self-employed from NSSO sources, we show that for the self-employed households who are supposedly in regular need of credit for their business, credit access has not improved as much during the FI-drive period as compared to pre-drive years. The paper also examines how the financial inclusion drive has impacted people’s dependence on private money lenders.
Speaker Bio:
Dr Meenakshi Rajeev is currently Professor of Economics at the Indian Institute of Technology, Jammu. Earlier she was HAG Professor and the the Reserve Bank of India Chair Professor and Head, Centre for Economic Studies and Policy, at the Institute for Social and Economic Change, Bangalore. She has graduated from IIT Kanpur in Statistics and did her Ph D in Economics from the Indian Statistical Institute, Kolkata. She has worked as a faculty and taught in the University of California at San Diego, Central Michigan University, Centre for Studies in Social Sciences, Kolkata, Presidency College, Kolkata. She has published more than 100 articles in reputed journals and as working papers from India and abroad and has over 10 books and monographs to her credit. Her recent book "Emerging Issues in Economic Development: A Contemporary Theoretical Perspective" from Oxford University Press and "Financial Access of the Urban Poor: A Story of Exclusion" from Springer are worth mentioning. Her areas of research include game theory, banking and credit market, industrial economics and development economics. She has visited and taught in a large number of universities in USA, UK, Germany, France and Norway, including Cornell University, University of Essex, Central Bank of Norway to name a few. She is in a number of committees of the Government . Recently she acted as the task force member for the formulation of the R &D policy for the state. She has taken up large number of research projects from institutions such as the World Bank, Asian Development Bank, Norwegian research council, Ford Foundation, Government of India and Karnataka, RBI and NABARD.