Multidimensional financial inclusion index for Indian states

Abstract In the digital age, financial inclusion continues to be connected to social inclusion. While most personal financial transactions are shifting from cash currency to digital transactions, we must ensure that marginalized members of society are not unbanked and excluded from financial opportunities. Many countries are declaring their intention to transform to cashless societies. India is one such country. As a case study, we investigated rural Indian villages that declared themselves as cashless to assess the financial reality of villagers. We conducted a survey of households (N=3,159) within villages across seven Indian states. In each state, we studied a village that was officially declared cashless and a nearby comparison village. Our findings suggest that the comparison villages did as well as the cashless villages, as financial inclusion via digital banking was minimal to nonexistent. Alongside significant state variations, we found that financial literacy and online access were the best predictors of performing any digital banking activity. This study concludes with a warning against rushing toward digital banking and the formation of cashless societies, as marginalized populations may be excluded.

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Are there links between financial inclusion, mobile telephony, and economic growth? Evidence from Indian states

Applied Economics Letters ◽

10.1080/13504851.2020.1752893 ◽

2020 ◽

pp. 1-5

Author(s):

Rudra P. Pradhan ◽

Pragyan P. Sahoo

Keyword(s):

Economic Growth ◽

Financial Inclusion ◽

Mobile Telephony ◽

Indian States

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What Role Does Financial Inclusion Play for Poverty Reduction? Empirical Evidence From The Indian States in the Post-Liberalization Era

10.21203/rs.3.rs-217570/v1 ◽

2021 ◽

Author(s):

Rajesh Barik ◽

Sanjaya Kumar Lenka

Keyword(s):

Poverty Reduction ◽

Urban Poverty ◽

Random Effect ◽

Principal Component ◽

Financial Inclusion ◽

Least Square ◽

Indian States ◽

Pca Method ◽

Using Data ◽

The Impact

Abstract The paper tries to analyzes the effect of financial inclusion on poverty reduction among 28 Indian states and rural-urban as well. Using data from 28 Indian states over the period of 1993 to 2015, this study constructed a single financial inclusion index through Principal Component Analysis (PCA) method, which signifies the state-wise variation in financial inclusion services. Furthermore, this study uses Fixed Effect, Random Effect, Panel Corrected Standard Errors, Feasible General Least Square, and Hausman-Taylor Regression model to know the impact of financial inclusion on state-wise poverty reduction and rural-urban poverty reduction as well. The results of this study suggest that financial inclusion has a negative and significant effect on state-wise and rural-urban poverty reduction respectively. With regards to the control variables, this study finds that variables like social sector expenditure, per capita state GDP and capital receipt are negatively associated with all three categories of poverty (i.e., overall poverty and rural-urban poverty) whereas the rural population is positively associated.

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Financial inclusion in India: an application of TOPSIS

Humanomics ◽

10.1108/h-09-2015-0061 ◽

2016 ◽

Vol 32 (3) ◽

pp. 328-351 ◽

Cited By ~ 7

Author(s):

Priyanka Yadav ◽

Anil Kumar Sharma

Keyword(s):

Composite Index ◽

Financial Inclusion ◽

Critical Parameters ◽

Infrastructure Development ◽

Indian States ◽

Content Type ◽

Factors Affecting ◽

Secondary Sources ◽

Order Preference ◽

Farmer Suicides

Purpose The purpose of this paper is to combine the critical parameters used to study financial inclusion into a composite index. The idea is to rank Indian states and union territories (UTs) on the basis of this index, determine change in ranks during 2011 to 2014 and identify factors affecting high/low scores on the index. Design/methodology/approach Data for the study were collected from secondary sources published by Reserve Bank of India (RBI) and Central Statistical Organization. Applying technique of order preference by similarity to ideal solution (TOPSIS), a composite multi-dimensional index of financial inclusion (IFI) has been built by using three broad parameters of penetration, availability and usage of banking services. Factors significantly influencing scores of states/UTs on IFI were identified using multiple regression analysis. Findings The value of financial inclusion for India on composite IFI has increased by 0.045 points during the study period. Share of agriculture to state gross domestic product, literacy ratio, population density, infrastructure development and farmer suicides are significant factors affecting financial inclusion. Practical implications The multi-dimensional IFI is a useful tool to measure financial inclusion using several parameters for various states/regions. The index can also be used to compare the performance of states/regions over same/different periods. Originality/value This paper is unique in its attempt to construct multi-dimensional IFI for Indian states/UTs by applying TOPSIS. It will prove useful for future researchers by combining several aspects of financial inclusion into single index.

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Financial Inclusion and Quality of Life: Empirical Evidences from Indian States with Special Reference to West Bengal

Management and Labour Studies ◽

10.1177/0258042x211026150 ◽

2021 ◽

pp. 0258042X2110261

Author(s):

Avisek Sen ◽

Arindam Laha

Keyword(s):

Quality Of Life ◽

Human Development ◽

Financial Literacy ◽

Financial Services ◽

West Bengal ◽

Well Being ◽

Financial Inclusion ◽

Indian States ◽

The Relationship

The conceptual connection between financial inclusion and quality of life (QOL) can be realized by a two-way relationships. On the one hand, financial inclusion induces QOL, while an improvement in QOL facilitates in generating demand for financial services, on the other hand. Even though several studies seek to find out the role of finance in the well-being of the population (especially human development), this article concentrates on QOL to eliminate the financial attributes of development (as captured by income dimension in Human Development Index). In this sense, this study addresses the research gap in the existing literature by establishing the relationship between financial inclusion and QOL. Specifically, the article attempts to explain the two-way tie-up between the financial inclusion and the QOL in India in the context of Indian states, in general, and West Bengal, in particular. Canonical correlation (CC; a multivariate data analysis technique) is used to estimate the relation between the financial inclusion and QOL. Empirical results suggest that western and the southern Indian states excel in the attainment of education, health and other amenities-based indicators of QOL. The conditions of the eastern part of the country in case of financial inclusion and the QOL are not at all satisfactory. In case of West Bengal, Kolkata being the state capital is performing well in both the factors. CC results suggest a significant association between the financial inclusion and QOL across Indian states. The deposit account of financial inclusion indicator and the infant survival rate of QOL indicator are playing a pivotal role in the relationship (both the Indian states and districts of West Bengal as well). This article establishes the effectiveness of the demand following approach of financial inclusion than that of supply leading approach. As the demand-side aspect of financial inclusion is becoming more important to the policymakers, the next policy priority of financial inclusion measures could be the generation of awareness on the financial services through financial literacy. JEL Codes: G2, O15, C39

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Financial Inclusion

International Journal of Applied Behavioral Economics ◽

10.4018/ijabe.2020100103 ◽

2020 ◽

Vol 9 (4) ◽

pp. 33-57

Author(s):

Anusha Goel

Keyword(s):

Financial Services ◽

Composite Index ◽

Financial Inclusion ◽

Three Dimensions ◽

Access To Finance ◽

Indian States ◽

Contemporary Issue ◽

Positive Growth ◽

Log Linear ◽

Over Time

Financial inclusion is a contemporary issue that has featured in the reforms agenda of several countries. Although it has gained momentum over time, the access to finance and basic financial services remained highly skewed across demographic and geographic segments. The purpose of the study is to analyse the performance of states/union territories in each dimension and composite index of financial inclusion. The focus is on ranking Indian states and union territories, identifying the major changes in ranks during 2000-01 to 2016-17, and finding the rate of expansion. The index of financial inclusion is calculated using three dimensions as per Sarma methodology. Log linear regression model is used to determine the growth rate in the measure of inclusion. The findings show that the index of financial inclusion value has enhanced in 28 and declined in four states/union territories out a group of 32 states/union territories. While a robust positive growth is observed in 23 states/union territories, the deterioration turns out to be significant in Chandigarh only.

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