● Inclusion and inclusive growth are important economic terms, generally opined as similar.
● But they are different as inclusion refers mostly to financial inclusion, while inclusive growth has a larger meaning.
● The growth process of an economy which ensures economic equality among different states, sectors, groups of people, is commonly known as inclusive growth. This inclusive growth takes care of everybody in an economy.
● If a multipurpose project like Nagarjuna Sagar, taking care of water requirements of a distant farmer from the project location, is considered to be inclusive growth.
● If the same distant farmer is provided with a crop loan, safeguarding his interests from the clutches of local rural money lender, it is considered as financial inclusion.
“The term Inclusion mostly linked to financial inclusion, whereas Inclusive growth refers to ensure the broader spectrum of economic growth in all sectors to all the people in a society i.e., not only the simple access to financial markets but also to health, employment, development, decision making, resource allocation etc., .”
● Let us discuss more about Inclusion hereafter…
Various definitions:Some of the major efforts made in the last five decades include..
Nationalisation of banks and
● Building up of robust branch network of scheduled commercial banks.
● Co-operatives and regional rural banks.
● Introduction of mandated priority sector lending targets.
● Lead bank scheme.
● Formation of self-help groups – micro finance.
● Permitting BCs/BFs to be appointed by banks to provide door step delivery of banking services.
● Zero balance BSBD accounts.
● Financial advisory services.
● Financial literacy promotion.
● Financial regulation.. RBI, SEBI, IRDA, PFRDA.
● Security markets/access to shares and mfs.
● Insurance facilities.
● Credit facilities, Rupay cards.
● White label ATMs.
● Payment Banks.
● Small finance banks.
● Post office products.
● Different financial products and services.
Different Govt. schemes
1. JAM… Jandhan Aadhar Mobile.
2. Pradhan Mantri Jeevan Jyoti Bima Yojana.
3. Pradhan Mantri Suraksha Bima Yojana.
4. Atal Pension Yojana (APY).
5. Varishtha Bima Pension Yojana.
6. Mudra Loans
Purpose of Inclusion
● The process of inclusion allows marginalised sections of our community, to get access to cheap loans, increase savings, have insurance and especially protects from the uneconomical money lenders’ exploitation and also shields from unorganised/informal financial institutions.
● Financial inclusion initiatives helps us to have proper financial markets with ample liquidity and safety. Therefore, savings and investment rates will pick up in an economy.
● A sound Financial literacy and scope for secured financial transactions are also possible with the improved financial inclusion activities.
● The supporting infrastructure like ICT tools, ATMs, Aadhar linking, open competition policies etc., will also increases employment generation and speeds up economic growth process.
MAIN POINTS TO REMEMBER
● As per census 2011, only 58.7% of households are availing banking services in the country.
● 51.4% of farmer households are financially excluded from both formal/informal sources. (NSSO 59TH SURVEY, 2002).
● World Bank publishes Financial Access Survey.
● UNDP HDI also calculates financial inclusion.
● CRISIL financial inclusix – an important indicator.
● World bank targets UFA. (Universal Financial Access by 2020)