IMPACT OF FINANCIAL REFORMS ON FINANCIAL INCLUSION IN INDIA

Abstract

In an emerging economy like India, the financial sector has come a long way since liberalization measures were implemented in the 1990s. As the economy grows and becomes more sophisticated, the banking sector has to develop side by side in a manner that supports and stimulates such growth. With increasing global integration, the Indian banking system and financial system as a whole had to be strengthened so as to be able to compete. Economic growth is only sustainable when the policies embark upon the economy with a holistic approach. The growth process should be inclusive: it should provide equal opportunity to different groups in society and maintain inclusivity in the distribution of the fruits of economic growth. One of the most serious barriers that the poor face is a limited access to finances at a right point and on favourable terms. As a result, sources of funding are a critical component of financial Inclusion. However, financial inclusion is more than just a lack of funds. This is important because India’s path of reforms has been different from most other emerging market economies: it has been a measured, gradual, cautious, and steady process, devoid of many flourishes that could be observed in other countries. Financial inclusion is closely related with inclusive growth and development as envisaged in 11th Five Year Plan. There has been remarkable progress in the direction of financial inclusion in India. Against this view point, the present paper purports to conduct qualitative research and examines the current status of financial reforms and its impact on financial inclusion. Keywords: Financial inclusion, Financial reforms, Indian reforms, financial capability, Poverty alleviation, Economic Growth, Financial Literacy.

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