Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Financial Inclusion of Indian States:An Empirical Analysis


Affiliations
1 Department of Economics, West Bengal State University, Berunanpukuria, P.O. Malikapur, North 24 Parganas, Kolkata 700126, West Bengal, India
     

   Subscribe/Renew Journal


Financial inclusion is one of the most important policies for economic development. India has also taken measures to accelerate financial inclusion. This paper, incorporating data on traditional and modern banking services as well as data related to transactions of Self-help Groups (SHGs)- linked with banks, re-examines the position of different states in terms of financial inclusion. Researchers have used modified version of Sarma’s (2008) multidimensional index and Principal Component Analysis (PCA). Formal banking services have been found to be the main factors in including the financially excluded. Most states have achieved a low rate of financial inclusion. Western, southern and some northern states have done better, whereas north-eastern states have lagged behind.
Subscription Login to verify subscription
User
Notifications
Font Size

  • Adhikary, M.L. and S. Bagli (2010), Impact of SHGs on Financial Inclusion –A Case Study in the District of Bankura, Journal of Management and Information Technology, 2(1): 16-32.

  • Australian Agency for International Development (AusAID) (2010), Financial Services for the Poor - Aid, March 2010.

  • Bagli, S. and Papita Dutta (2012), A Study Of Financial Inclusion In India, Radix International Journal of Economics & Business Management, 1(8): 1-18.

  • Bajrang and Kumar (2013), Financial Inclusion through SHGs: A Case Study of Narnaul Block in Haryana, International Journal of Enhanced Research in Management and Computer Applications, 2(6): 15-20.

  • Banerjee, Tanmoyee, Malabika Roy and Chandralekha Ghosh (2010), Borrower’s in a Village Economy: An Analysis of Credit Contracts across Rural Households, Asia-Pacific Social Science Review, 10(1): 85-101.

  • Bhattacharjee, Nilanjan (2014), Financial Inclusion of the Identified Slum Dwellers in Assam, Review of Literature, 1(12): 1-9.

  • Camara, Noelia and David Tuesta (2014), Measuring Financial Inclusion: A Multidimensional Index, BBVA Research Working Paper 14/26.

  • Chakrabarti, Manas (2013), The Role Of States Rural Banks (RRBs) In Financial Inclusion: An Empirical Study On West Bengal State In India, ABHINAV: National Monthly Refereed Journal of Research in Commerce & Management, 2(8): 51-62.

  • Chakravarty, Satya R. and Rupayan Pal (2010), Measuring Financial Inclusion: An Axiomatic Approach, Indira Gandhi Institute of Development Research (IGIDR).

  • Chattopadhyay, S. (2011), Financial Inclusion in India: A Case-study of West Bengal, RBI Working Paper Series.

  • Chibba, M. (2009), Financial Inclusion, Poverty Reduction and the Millennium Development Goals, European Journal of Development Research, 21(2):213–230.

  • CRISIL (2013), Inclusix, An Index to Measure India’s Progress on Financial Inclusion.

  • ---------- (2015), Inclusix, An Index to Measure India’s Progress on Financial Inclusion.

  • Kamath, Rajlaxmi (2008), Ramanagaram Financial Diaries: Loan repayments and Cash Patterns of the Urban Slums, IIMB Working Paper 268.

  • Leeladhar, V. (2005), Taking Banking Services to the Common Man - Financial Inclusion, Commemorative Lecture by Shri V. Leeladhar, Deputy Governor, Reserve Bank of India at the Fedbank Hormis Memorial Foundation at Ernakulam, Retrieved on 20th March, 2017 from https://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=218

  • Massey, J. (2010), Role of Financial Institutions in Financial Inclusion, FICCI’s Banking and Finance Journal, 4:4-9, available at http://ficci.in/sector/3/Add_docs/banking-digest-October-2010.pdf.

  • Mukherjee, Sarbani and Subhadri Mallik (2015), Is Financial Inclusion Cause or Outcome? A State-Wise Assessment in India, Working Paper132, Madras School of Economics.

  • Okpara, Godwin C. (2013), Developing an Index of Financial Inclusion: An Average Ratio Approach, Department of Banking and Finance, Abia State University, Uturu-Nigeria.

  • Pal, Rama and Rupayan Pal (2012), Income Related Inequality in Financial Inclusion and Role of Banks: Evidence on Financial Exclusion in India, Indira Gandhi Institute of Development Research, Mumbai.

  • Paramasivan, C. and V. Ganeshkumar (2013), Overview of Financial Inclusion in India, International Journal of Management and Development Studies, 2(3): 45-49.

  • Pineyro C. (2013), Financial Inclusion Index: Proposal of A Multidimensional Measure for Mexico, Revista Mexicana de Econom´ıa y Finanzas, 8(2): 157-180.

  • Rangarajan Committee (2008), Report of the Committee on Financial Inclusion, Government of India.

  • Reserve Bank of India, Branch Banking Statistics, Retrieved on 7.7.17, https://www.rbi.org.in/scripts/AnnualPublications.aspx?head=Branch%20Banking%20Statistics.

  • Sarma, Mandira (2007), Index of Financial Inclusion (A Concept Note), Indian Council for Research on International Economic Relations.

  • ---------- (2008), Index of Financial Inclusion, Indian Council for Research on International Economic Relations Working Paper 215.

  • Sarma, Mandira and Jesim Pais (2008), Financial Inclusion and Development: A Cross Country Analysis, Indian Council for Research on International Economic Relations.

  • Singh, Anurag B. and Priyanka Tandan (2012), Financial Inclusion in India: An Analysis, International Journal of Marketing, Financial Services and Management Research, 1(6): 41-54.

  • United Nations (2010), Financial Services for the Poor - Aid, Australian Agency for International Development (AusAID).

  • http://www.rbi.org.in

  • https://www.nabard.org

  • www.Censusindia.gov.in


Abstract Views: 694

PDF Views: 2




  • Financial Inclusion of Indian States:An Empirical Analysis

Abstract Views: 694  |  PDF Views: 2

Authors

Chandralekha Ghosh
Department of Economics, West Bengal State University, Berunanpukuria, P.O. Malikapur, North 24 Parganas, Kolkata 700126, West Bengal, India
Payel Roy
Department of Economics, West Bengal State University, Berunanpukuria, P.O. Malikapur, North 24 Parganas, Kolkata 700126, West Bengal, India

Abstract


Financial inclusion is one of the most important policies for economic development. India has also taken measures to accelerate financial inclusion. This paper, incorporating data on traditional and modern banking services as well as data related to transactions of Self-help Groups (SHGs)- linked with banks, re-examines the position of different states in terms of financial inclusion. Researchers have used modified version of Sarma’s (2008) multidimensional index and Principal Component Analysis (PCA). Formal banking services have been found to be the main factors in including the financially excluded. Most states have achieved a low rate of financial inclusion. Western, southern and some northern states have done better, whereas north-eastern states have lagged behind.

References





DOI: https://doi.org/10.21648/arthavij%2F2017%2Fv59%2Fi3%2F167646