Significance of financial inclusion for India: Reduce Poverty: Financial inclusion means greater access to financial services and an increase in savings. This would help in decreasing income inequality & poverty and would lead to increase in employment levels. Growth: It encourages the habit toRead more
Significance of financial inclusion for India:
- Reduce Poverty: Financial inclusion means greater access to financial services and an increase in savings. This would help in decreasing income inequality & poverty and would lead to increase in employment levels.
- Growth: It encourages the habit to save, thus enhancing capital formation in the country and giving it an economic boost. Also, the availability of sufficient and transparent credit from formal banking institutions will promote the entrepreneurial spirit among the people, leading to an increase in productivity and prosperity in rural areas.
- Service delivery: Direct cash transfers to beneficiary bank accounts rather than physical cash payments against subsidies have become possible. Thus funds actually reach the targeted beneficiaries instead of being siphoned off along the way.
- Banks’ efficiency: Banks which are operating in a financial inclusion sector could experience higher operating efficiency in financial intermediation.
What are the challenges to financial inclusion in India?
- Illiteracy – In India, where nearly 1/4th of the population is illiterate and below the poverty line. Thus ensuring financial inclusion is a challenge.
- Low income and the inability to provide collateral security.
- Lack of enough bank branches in rural areas continues to be the roadblock to financial inclusion.
- More reliance on informal lending.
- Difficulty in understanding different product offerings, financial terms, and conditions.
- A lot of hidden bank charges have demotivated poor persons from availing financial services.
- Low-income groups don’t see banks as welcoming and often believe they are not for them.
- Lack of credible, low-cost and high-quality financial advice.
- Most women are being excluded from the formal financial system.
- Disabled people find it difficult to access banks.
- The rising level of Non-Performing Assets (NPAs) of banks due to the large corporates makes it difficult to improve financial inclusion situation in India.
What are the initiatives taken by the government to improve financial inclusion?
- Banking initiatives:
- Regional Rural Banks (RRBs): On the basis of Narasimham Working Group 1975, RRBs were established to serve banking needs of rural population.
- Priority Sector Lending: is an important role given by the RBI to the banks for providing a portion of the bank loans to few specific sectors such as agriculture or small scale industries.
- Business correspondents: RBI permitted banks to engage business correspondents/facilitators for providing door-step delivery of financial and banking services.
- No-frills accounts: No-frills accounts means the bank accounts which does not require a minimum balance (or low sometimes). This means more accessibility to vast sections of the population.
- KYC relaxation: Know Your Customer (KYC) requirements for opening bank accounts were relaxed for small accounts in August 2005. The opening of bank accounts became even easier with Aadhaar introduction.
- Jan Dhan, Aadhaar and Mobile (JAM): It is a three-part strategy based on using digital technologies- Jan Dhan (banking), Aadhaar (Biometric Identity) and Mobile (transactions).
- Other initiatives: Establishment of payment banks and small finance banks.
- Establishment of MUDRA bank to refinance micro-finance institutions to lend to non-formal sectors such as MSMEs through PM Mudra Yojana.
- Financial literacy centres were launched by commercial banks at the request of the RBI.
- Financial inclusion of women through Aadhaar implementation.
- Unified Payments Interface (UPI) platform built by the National Payments Corporation of India (NPCI).
- National Centre for Financial Education was established in 2017 to implement the National Strategy for Financial Education.
- Self-Help Group (SHG) – Bank Linkage Programme (SBLP) was launched by NABARD to provide door-step banking to the poor with the help of SHGs.
- Social security Initiatives:
- PM Suraksha Bima Yojana (PMSBY): Accidental death cum disability insurance, renewable 1 year, for 18-70 age group.
- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Life insurance, renewable 1 year, for 18-50 age group.
- Atal Pension Yojana: Focus on unorganised sector.
- Pradhan Mantri Jan Dhan Yojana: PMJDY has ensured universal access to bank account and India now has 180 billion accounts. However, 48% of those accounts haven’t seen any transaction in the last one year.
The intersection of race, class, and gender has profoundly impacted the progress of women's rights globally, shaping both the challenges faced by women and the strategies used to advance their rights. Here are some key points to consider: Race 1. Historical Discrimination: Women of colour have histoRead more
The intersection of race, class, and gender has profoundly impacted the progress of women’s rights globally, shaping both the challenges faced by women and the strategies used to advance their rights. Here are some key points to consider:
Race
1. Historical Discrimination: Women of colour have historically faced compounded discrimination due to both their gender and their race. For example, in many Western countries, women of colour had to fight not only for gender equality but also against systemic racial discrimination.
2. Civil Rights Movements: The civil rights movements of the 20th century in countries like the United States significantly intersected with the women’s rights movement, highlighting the need for a more inclusive approach that addressed the specific needs of women of colour.
3. Global South Perspectives: In many countries in the Global South, racial and ethnic diversity adds layers of complexity to women’s rights issues. Indigenous women, for instance, often face unique challenges that are different from those of non-indigenous women, such as land rights and cultural preservation.
Class
1. Economic Inequality: Class disparities significantly impact women’s rights, as economically disadvantaged women often have fewer resources and opportunities to advocate for their rights. Poverty can exacerbate issues like access to education, healthcare, and legal protection.
2. Labor Rights: Working-class women, especially those in low-paying, informal, or precarious jobs, face unique challenges in the fight for labour rights and fair wages. These economic struggles are often compounded by gender discrimination in the workplace.
3. Access to Services: Women from lower socioeconomic backgrounds often have less access to essential services, such as reproductive healthcare and education, which are crucial for advancing their rights and overall well-being.
Gender
1. Patriarchal Norms: Patriarchal societies impose strict gender roles that limit women’s freedoms and opportunities. The fight for women’s rights often involves challenging these deeply ingrained norms and advocating for gender equality in all aspects of life.
2. Legal Rights: Gender-based legal discrimination remains a significant barrier in many parts of the world. Efforts to secure legal rights for women—such as property rights, inheritance rights, and protection from gender-based violence—are crucial components of the women’s rights movement.
3. Political Representation: Increasing women’s political representation is essential for ensuring that women’s issues are addressed at the policy level. Gender intersects with race and class in this arena as well, as women of colour and working-class women often face additional barriers to political participation.
Intersectionality in Action
1. Inclusive Feminism: The concept of intersectionality, coined by Kimberlé Crenshaw, has been pivotal in shaping a more inclusive feminist movement that addresses the varied and interconnected forms of oppression that different groups of women face.
2. Grassroots Movements: Grassroots movements around the world often adopt an intersectional approach to address the specific needs of diverse groups of women. These movements are vital in pushing for systemic change that benefits all women, regardless of race, class, or gender.
3. Policy and Advocacy: Advocacy efforts that consider the intersection of race, class, and gender are more likely to create effective and sustainable changes. Policymakers and activists who incorporate intersectionality into their work can better address the root causes of inequality and discrimination.
In conclusion, the intersection of race, class, and gender is critical in the global progress of women’s rights. Understanding and addressing these intersections are essential for creating a more equitable and just world for all women.
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