Ghazalpreet KaurAIR 529 · CSE 2022 · 248 wordsTheir whole copy
Opening · a definition
Financial inclusion is defined as timely access to credit facilities, availability of pension and insurance to all people in India. It is not just ensuring economic security to people but accelerates the economic growth.
Earlier policies vis-a-vis digital financial inclusion:
Traditional method → Regional Rural Banks
Body · points and prose
→ Banking Correspondents → Priority sector lending
New method pushed by digitisation
Financial Inclusion boost economic growth
Ensure economic security → poors and weaker sections of society are made economically secure give them psychological support
Demand increase → when income in the account increase, consumption of goods rises, thus economy boost.
Savings and hence investment increase → savings in the bank can be used to park towards investments by coporates thus boost public and private investment
Data in policy making → vast amount of data helped government in evidence based policy making
Ensures transparency in transaction → keeps check on the nefarious activities on digital network.
Formalisation of economy → help to decrease informalisation in the formal economy. (SBI report on informalisation in formal economy → decrease by 54% post-demonetisation).
Tax revenues increased by formalisation of economy.
According to Financial inclusion Index → 54% of India is in financial inclusion bracket. To boost more:
- Focus on digital literacy
- Leverage post-offices to increase financial savings.
- Infrastructure → ATMs, banks in rural areas.
- Data protection and prevent privacy breach.
Close · a way forward
Financial inclusion is paramount in ensuring inclusive growth. It must be given huge push.
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