Financial Inclusion

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Financial Inclusion

Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.

Government of India has launched an innovative scheme of Jan Dhan Yojna for Financial Inclusion to provide the financial services to millions out of the regulated banking sector.

 

Various program’s for financial inclusion are:-

  • Swabhimaan Scheme:under the Swabhimaan campaign, the Banks were advised to provide appropriate banking facilities to habitations having a population in excess of 2000 (as per 2001 census) by March 2012.
  • Extention of  the banking networkin unbanked areas,
  • Expansion of Business Correspondent Agent (BCA)Network
  • Direct Benefit Transfer(DBT) and Direct Benefit Transfer for LPG (DBTL)
  • RuPay, a new card payment scheme has been conceived by NPCI to offer a domestic, open-loop, multilateral card payment system which will allow all Indian banks and financial Institutions in India to participate in electronic payments.
  • Pradhan Mantri Jan-Dhan Yojana (PMJDY)was formally launched on 28th August, 2014. The Yojana envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension. The beneficiaries would get a RuPay Debit Card having inbuilt accident insurance cover of Rs.1.00 lakh. In addition there is a life insurance cover of Rs.30000/- to those people who opened their bank accounts for the first time between 15.08.2014 to 26.01.2015 and meet other eligibility conditions of the Yojana.

 

  • Rapid growth (SDG 8) is the key weapon in any country’s arsenal for combating poverty. On the one hand, it creates well-paid jobs that empower households by giving them necessary purchasing power to access food, clothing, housing, education and health. On the other, it places ever-rising revenues in the hands of the Government to finance social spending. India has continued its programme of economic reforms to achieve sustained rapid growth. The reforms have included fiscal consolidation, inflation targeting, improved governance all around, accelerated infrastructure development (SDG 9), curbing of corruption (SDG 16), Aadhaar Act, Insolvency and Bankruptcy Act, Goods and Services Tax (GST), further liberalization of Foreign Direct Investment (FDI), closure of sick Public Sector Units and much more. The result has been that, today, India is the fastest growing large economy in the world. It grew 7.9 per cent during fiscal year 2015-16 and 7.1 per cent during 2016-17.
  • An important strategy for achieving this goal is focused on generating meaningful employment by developing agricultural infrastructure, productive assets and entrepreneurship-based livelihood opportunities. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which is sometimes described as the world’s largest cash transfer programme, has generated over 2 billion person-days’ of employment (SDG 8) during the last year. It has helped reduce extreme poverty as well as enhance the infrastructure and purchasing power in rural areas. The benefits have largely been reaped by women (SDG 5) and disadvantaged sections of society (SDG 10). Similarly, the DeenDayalAntyodayaYojana-National Livelihoods Mission provides skilled employment to marginalized communities.
  • Further, two major programmes, the PradhanMantriJeevanJyotiBimaYojana and PradhanMantriSurakshaBimaYojana, provide access to life and accident insurance for 130 million subscribers for nominal annual premiums. Additionally, initiatives like the Atal Pension Yojana and the National Social Assistance Programme provide pension to workers in the unorganized sector, widows and the differently abled.
  • Another crucial strategy for eliminating poverty is ensuring access to basic services. In the area of education, there is a National Mission, which is focused on providing universal access to quality primary education. Moreover, the Right to Education Act has established an effective legal framework entitling all children (6-14 years) to free and compulsory education based on principles of equity and non-discrimination. Similarly, the National Health Mission and the Integrated Child Development Services (ICDS) initiatives strive to provide access to primary health care and nutrition for the population.
  • India is committed to ensuring housing for all by 2022. To enable the achievement of this objective, the Prime Minister’s Housing Scheme provides direct financial assistance to poor households.
  • For fulfilling the cooking fuel requirements of the population in an environmentally friendly manner, the PradhanMantriUjjwalaYojana, launched in 2016, aims to provide Liquefied Petroleum Gas (LPG) to poor families with initial financial support for accessing a connection. The programme has enabled the provision of more than 20 million LPG connections since its launch a year ago.
  • Providing access to adequate and safe drinking water as well as sanitation is crucial. Under the National Rural Drinking Water Programme, more than 77% of the rural habitations have been fully covered with 40 litres of drinking water per capita on a daily basis. The objective of the Clean India Movement is to ensure an Open Defecation Free India by 2019. Over the last two years, more than 39 million household toilets have been constructed. Moreover, 193,000 villages and 531 cities have been successful in ending the practice of open defecation. The Movement also focuses on bringing about sustained behaviour change through the engagement of a range of stakeholders, including religious and political leaders.
  • Programmes under the National Food Security Act cover more than 800 million people in the country. The Public Distribution System, for instance, is one of the largest food security initiatives in the world. In recognition of empirical evidence that women pay greater attention to household security, the Government has chosen to issue ration cards in the name of the senior most female member of the household. Other initiatives that contribute to this goal are the ICDS and the Mid-Day Meal Programme. The latter provides nutritious cooked meals to 100 million children in primary schools.
  • Governance reforms are being undertaken for improving the effectiveness of food security programmes. These include digitization of ration cards, leveraging Aadhaar for authenticated delivery of benefits and an online grievance redressal mechanism.
  • Further, the National Mission on Sustainable Agriculture in collaboration with other stakeholders is implementing climate change adaptation strategies for sustaining agricultural productivity. Since 2014, the land under organic farming has increased to 200,000 ha. Additionally, over 62 million Soil Health Cards, with crop-wise nutrient management advisories, have been issued.
  • Moreover, a comprehensive plan is being implemented for doubling farmers’ income by 2022. This includes expediting tenancy reforms, promoting crop diversification and expanding micro-irrigation (1.3 million ha covered during the last two years).
  • Another area in which considerable progress has been made is digitization of agricultural marketing. The electronic National Agricultural Marketing platform now covers 250 Mandis (agricultural markets) across the country. A revamped crop insurance programme, the PradhanMantriFasalBimaYojana, has also been launched.

Ensure healthy lives and promote wellbeing for all at all ages

  • Beyond increasing access, several initiatives are also being taken for improving the quality of health services. These include the development of a composite index and an award for ensuring a hygienic environment in Government health facilities.
  • The National Health Policy, 2017, specifies targets for universalizing primary health care, reducing infant and under-5 mortality, preventing premature deaths due to non-communicable diseases as well as increasing Government expenditure on health.
  • To tackle the death of children due to vaccine-preventable diseases and the risk due to incomplete immunization, the Government is aiming to provide vaccination against diphtheria, whooping cough, tetanus, tuberculosis, polio, measles and hepatitis to all unimmunized or partially immunized children by 2020.
  • As a step towards achieving universal health coverage, the Government of India has announced a health insurance cover to the tune of INR 100,000 (USD 1,563) for families below the poverty line.

Gender equality and women’s empowerment

  • Several important initiatives have been taken during the last few years for promoting gender equality. A flagship initiative is BetiBachaoBetiPadao (Save the Girl Child Educate the Girl Child), under which State Governments are implementing a range of measures suited to their local contexts to elevate the status of the girl child.
  • Additionally, a Maternity Benefit Programme has been launched for all pregnant and lactating mothers. Through conditional cash transfer, it protects women from wage loss during the first six months after childbirth.
  • For raising the levels of female labour force participation, a number of initiatives are being implemented including Stand-up India and MGNREGA. The Women Empowerment Campaign is another effort focused on enabling digital literacy and gainful employment opportunities.
  • Further, Women Empowerment Centres are being established for providing comprehensive services at the village-level.
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