Reaching sustainable development goals: Bringing financial inclusion to reality in India

• Published date: 01 November 2020
• Author: Vinay Kandpal
• Date: 01 November 2020
• DOI: http://doi.org/10.1002/pa.2277

PRACTITIONER PAPER

Reaching sustainable development goals: Bringing financial

inclusion to reality in India

Vinay Kandpal

Department of General Management, School

of Business, University of Petroleum and

Energy Studies, Dehradun, India

Correspondence

Vinay Kandpal, Department of General

Management, School of Business, University

of Petroleum and Energy Studies, Kandoli Via

Premnagar, Knowledge Acres, Dehradun,

Uttarakhand 248007, India.

Email: vinayaimca@gmail.com

The paper critically analyzes the problems and the hurdles for the financial inclusion

for the economical growth and plans to call attention to the importance of Pradhan

Mantri Yojana to bring Financial Inclusion a reality. A country can develop economi-

cally and socially if its weakest section can end up being financially independent. To

achieve inclusive growth, the Government of India has introduced many schemes

recently and steps have been taken that the benefits of policies reach the people.

The schemes include Pradhan Mantri Jeevan Jyoti Yojna, Pradhan Mantri Bima Sur-

aksha Yojna and Pradhan Manti Atal Yojna that have already been launched. The

unawareness of financial institutions in the rural, semi-urban and hilly areas of India

is worrisome. The study focuses on the secondary source of information obtained

through the website of the Reserve Bank of India website and other published

sources. Sustainable growth, economic development and progress of an economy

can only be achieved if a country has a well-equipped financial system. All the assets,

funds and capital have to be properly channelized for attaining inclusive and sustain-

able development goals in the Indian economy.

1|INTRODUCTION

Financial inclusion is required in today's economy for making the poor

avail the financial schemes which are aimed at the poor at reasonable

costs. The motive behind financial inclusion is to enable maximum

people availing the financial benefits. To ensure the financial inclusion,

it is important to be a part of the financial region.

Researchers have stated that “the lack of use of financial services

could lead to a poverty trap and an increase in the inequality gap”

(Aghion & Bolton, 1997; Banerjee & Newman, 1993; Beck, Demirgüç-

Kunt, & Levine, 2007). Similarly, other researcher has put forward that

financial schemes aid in the people's savings, (Aportela, 1999; Ashraf,

Karlan, & Yin, 2010) consuming of the required things (Ashraf

et al., 2010), and investment toward productive things (Dupas &

Robinson, 2009).

There is a connection between poverty and the banking services

where the latter will assist in inclusion of the underprivileged in finan-

cial schemes. Most of the poor households do not look for gaining

profit but not using their income for that purpose. Therefore, the

income and the needs should be met through the initiatives taken by

the Government of India through the Reserve Bank of India. India had

nationalised its banks in the year 1969 which could possibly be

claimed as the path toward financial inclusion. The usage of financial

schemes to a particular section of the society who needs it the most

is the plan behind inclusion. The financial institutions in the non-urban

regions are a matter to think over.

On August 15, 2014, the Prime Minister of India announced the

Pradhan Mantri Jan Dhan Yojna (PMJDY) scheme which was subse-

quently launched on August 28, 2014. The scheme aimed at improv-

ing the lives of the common man and reducing the gap between the

rich and the poor with at least the opening of a bank account.

In the past few years, much emphasis has been given to financial

inclusion and the transfer of benefit to the excluded sections of soci-

ety in a planned manner. The schemes include a “life-insurance

scheme”known as Pradhan Mantri Jeevan Jyoti Yojna, “an accidental

death or disability insurance scheme”known as Pradhan Mantri Bima

Suraksha Yojna and a pension scheme named Pradhan Manti Atal

Yojna, which has been already launched. The PMJDY has propelled

the inclusion of the entire population in the financial network as a pre-

requisite for the financial and economic development of the country.

Received: 19 March 2020Revised: 12 May 2020Accepted: 9 July 2020

DOI: 10.1002/pa.2277

J Public Affairs. 2020;20:e2277.wileyonlinelibrary.com/journal/pa© 2020 John Wiley & Sons Ltd1of10

https://doi.org/10.1002/pa.2277