FINANCIAL INCLUSION -THE WAY TOWARDS INCLUSIVE GROWTH

Inclusive growth as the literal meaning of the two words refers to both the pace and the pattern of the economic growth. The inclusive growth approach is long term in nature which focuses on the productive employment which increases the means of incomes of the excluded section. Inclusive growth allows people to contribute to and benefit from economic growth. The eleventh five year plan (2007-2012) envisions inclusive growth as the key objective. In this paper the author explores how Financial inclusion acts as a means towards the inclusive growth of the vast excluded population. “Financial inclusion is the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost”. Reserve Bank of India in collaboration with the Government of India had formulated a policy namely Financial Inclusion Policy (2005) for financially including of the excluded. The policy was framed with the objective of employment generation, asset creation and income increase which would help in the upliftment of the weaker or poor people. Also, the paper recognises the challenges which hinder the inclusion of the excluded section and the possible opportunities which can be explored for the inclusion. Formal financial institutions, NGOs and SHGs help in the inclusive growth through financially including the low income and weaker section of the population.