Measures for Achieving Financial Inclusion in India and Its Inclusive Growth

Abstract

Financial Inclusion is the first and foremost policy option to fulfil social and financial needs across the country. The primary responsibility, any country, is providing financial to vulnerable groups to improve their standard of living. Fifty six percent of adults the world do not have access to formal financial services (Oya Pinar Ardic, 2011), whereas in India 89.3 million farmers i.e., 72.7% of total population, are excluded from formal sources of finance (KabitaKumariSahu, 2013). The Reserve Bank of India directed commercial banks to promote financial inclusion India which turn results the development of economically backward areas. Rajan&Zingales, (1998) indicates that there is a positive relationship between financial developments with growth banking industry through financial inclusion. Leeladhar, (2006) states that liberalization of banking at an affordable cost to vast sections of disadvantaged and low-income groups is essential for sustainable growth of an economy. As per the directions of RBI, all commercial banks have been taking assistance from various social and financial entities like Joint Liability Groups, Non-Banking Finance Companies (NBFC), Self-help groups, co-operative Banks, and Regional Rural Banks (RRBs) to improve financial inclusion.Financial inclusion is a very important, complementary and incremental approach for inclusive development and poverty reduction (Michael Chibba, 2009).The main objective of the study is to know the status of financial inclusion India and to give appropriate suggestions for inclusive growth of an economy.