Poverty Alleviation through Financial Inclusion:Policies, Measures and Achievements of Financial Inclusion through Banks in India

Though our country's economy is growing around nine percent, the growth is not inclusive with the economic condition of the people in rural areas which is worsening further. One of the typical reasons for poverty is being financially excluded. Financial Inclusion is considered to be an important determinant for social inclusion of poor and vulnerable. It is in fact, one of the essential conditions for reduction of poverty and socio-economic inequalities in the society. Though there are few people in India who are enjoying all kinds of services from savings to net banking, but still around 40 percent of people lack access to even basic financial services like savings, credit and insurance facilities. So, an inclusive sector should not only serve the bankable clients, but also integrate the "un-bankable" clients by making them "bankable". Despite some drastic actions taken by the Government like nationalisation of banks, 40 percent of credit targets to priority sector, opening of RRBs and LABs, etc., during the post three decades as a form of financial inclusion, around 80 percent of rural households do not have access to credit from a formal source. The paper analyses the objectives and significance of financial inclusion, its progress and also discusses about whether bringing people under banking category by this financial inclusion project helps in achieving the ultimate goal of lifting the standard of living of the poor and reduce poverty in our country.