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

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Financial Inclusion of Indian States:An Empirical Analysis


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

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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.
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  • Financial Inclusion of Indian States:An Empirical Analysis

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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.

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