Issues and Challenges of Expanding Financial Inclusion in the North-Eastern States

Abstract

The North Eastern Region (NER) of the Indian Union constitutes eight states namely Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. It covers 8 percent of the geographical area of the country, accounts for 3.9 percent of the population and 2.7 per cent of the allIndia net domestic product (NDP). The region is rich in development potential in terms of natural resource endowment, tourism and exports. However, with lack of basic infrastructure facilities, the states in the region lagged behind other regions in economic development. In absence of industrial and service sector development, the economy in the region reflects primarily the character of agrarian economies with two-thirds of its workforce dependent on agriculture. The gains of the rapid growth witnessed of the Indian Economy during the last two decades have not reached this region in an equitable manner. Recognizing the need for the region to catch up with other regions in economic development, the Government of India has categorized the North-Eastern states as Special Category States for allocation of Central Plan Assistance. Special attention has been given to the development of the region from Eighth Plan period onwards. Dr. N. S. Shetty* Mrs. Sona P. Rai** Issues and Challenges of Expanding Financial Inclusion in the North-Eastern States1