Journal of Commerce and Accounting Research

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The Impact of Financial Inclusion on the Economic Growth of India:An Emapirical Analysis


Affiliations
1 Research Scholar, Department for Commerce, Aligarh Muslim University, Aligarh, Uttar Pradesh, India
2 Professor, Department of Commerce, Aligarh Muslim University, Aligarh, Uttar Pradesh, India
     

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Financial inclusion refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity. Financial inclusion broadens the resource base of the financial system by incorporating a culture of savings among the large segment of the rural population and plays its own role in the economic development. The present study aims to investigate the impact of financial inclusion on the economic growth over a period of ten years from 2005-06 to 2015-16. GDP at current price is taken as the proxy measure for economic growth whereas financial inclusion is measured by number of Automatic Teller Machines (ATMs) and credit-deposit ratio (CDR). Secondary data is used and the data has been analyzed by using multiple regression analysis. Before analysis, the adequacy of the data has been checked. To check the multicollinearity and Autocorrelation problems, Variance Inflation Factor and Durbin-Watson tests have been used. Results of the study found that the ATMs have positive significant impact on the GDP whereas the CDR has positive insignificant impact on the GDP of the country.

Keywords

Financial Inclusion, Banks, GDP, ATM, Credit-Deposit Ratio.
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  • The Impact of Financial Inclusion on the Economic Growth of India:An Emapirical Analysis

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Authors

Zubair Ahmad Sofi
Research Scholar, Department for Commerce, Aligarh Muslim University, Aligarh, Uttar Pradesh, India
M. Nasir Zamir
Professor, Department of Commerce, Aligarh Muslim University, Aligarh, Uttar Pradesh, India

Abstract


Financial inclusion refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity. Financial inclusion broadens the resource base of the financial system by incorporating a culture of savings among the large segment of the rural population and plays its own role in the economic development. The present study aims to investigate the impact of financial inclusion on the economic growth over a period of ten years from 2005-06 to 2015-16. GDP at current price is taken as the proxy measure for economic growth whereas financial inclusion is measured by number of Automatic Teller Machines (ATMs) and credit-deposit ratio (CDR). Secondary data is used and the data has been analyzed by using multiple regression analysis. Before analysis, the adequacy of the data has been checked. To check the multicollinearity and Autocorrelation problems, Variance Inflation Factor and Durbin-Watson tests have been used. Results of the study found that the ATMs have positive significant impact on the GDP whereas the CDR has positive insignificant impact on the GDP of the country.

Keywords


Financial Inclusion, Banks, GDP, ATM, Credit-Deposit Ratio.

References