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District Level Assessment of Financial Inclusion in India

Yadav, Vishal and Singh, Shishir Kumar and Velan, Nirmala and Aftab, Md Asif (2020): District Level Assessment of Financial Inclusion in India.

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Abstract

The study builds an index across districts of 27 Indian states for the period 2014 and 2018, i.e., prior to and after the launch of PMJDY. The FII is developed in line with Sarma (2012) methodology. The proposed index used three dimensions: Deposit Penetration, Credit Penetration, and Availability. The study's significant finding shows southern and western districts are performing better in financial inclusion than other districts. Most of the central, eastern, and north-eastern districts fell under the low inclusion category. Further, FII has a positive relation with HDI. Furthermore, the particular scheme PMJDY has not taken the economy towards high financial inclusion as the number of high inclusion districts increased from 6 in 2014 to just 9 in 2018, and medium inclusion districts increased from 41 in 2014 to 60 in 2018. The investigation suggests that monetary comprehensiveness needs a reasonable methodology that incorporates a fundamental update of the monetary framework and fortifying and growing monetary organizations amassing especially in backward regions, where government activity is required, at the same time handling digital education by making mindfulness, which will additionally expand the interest for monetary services.

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