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UPSC Mains 2022

Is inclusive growth possible under market economy ? State the significance of financial inclusion in achieving economic growth in India.

General Studies Paper - 3, Topic: Inclusive Growth

Dec 30, 2022

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Inclusive growth is the idea that economic growth should be accompanied by an improvement in the living standards and well-being of all members of society, including disadvantaged and marginalized groups. While it is possible for inclusive growth to occur under a market economy, it is not an assurance and may require the implementation of certain policies and interventions.

 

Financial inclusion, which refers to the ability of individuals and businesses to access and use financial products and services, can play a significant role in achieving inclusive growth. In India, financial inclusion has been a priority for the government, which has implemented a number of initiatives to increase access to financial services for underserved populations. These initiatives have included the creation of microfinance institutions, the expansion of the formal banking sector into rural areas, and the promotion of digital financial services.

 

Research has shown that financial inclusion can contribute to economic growth by increasing the efficiency of financial intermediation, boosting investment and entrepreneurship, and promoting the development of small and medium-sized enterprises. It can also help to reduce poverty and income inequality, as it can provide individuals and businesses with the tools they need to participate in the formal economy and access credit and other financial services.

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