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India
is the fastest-growing trillion-dollar economy in the world and the
sixth-largest with a nominal GDP of $2.61 trillion. India is poised to become
the fifth-largest economy overtaking the United Kingdom by 2019 as per the IMF
projection. Despite consistent high growth, India has failed to redistribute
its earned resources uniformly among its citizens which can be reflected in its
human development index in which it ranked 130th out of 180 countries which is
very dismal for the sixth largest economy of the world. Lack of financial
inclusion is the main reason behind poor human development in India.
Reasons behind low indicator of human
development in India despite high growth
• Concentration of land resources
in few hands due to British land revenue policies such as permanent settlement
and non-implementation of land reform policies in a better way led to
divergence of Indian society before and after independence.
• Policies which were adopted
after independence such as those during green revolution which benefitted large
farmers causing intra-regional disparities and were concentrated to few regions
causing inter- regional disparity thus government fails to sustain the process.
• Government efforts to develop
backward areas by setting large scale industries in backward areas too could
not work due to corruption and lack of implementation of corporate social
responsibility norms.
• Banks before nationalization
were private owned property of few industrialists who used them as their
private purse. Further, it was used a political tools to please supporters of
ruling political elite.
• Despite these facts, government
policies were somehow socialist in nature which too faded away after adoption
of new economic policies of 1991.
• After reformation in economy,
in lure of rapid development, government provided more impetus to economic
growth than financial inclusion. This came in the form of concessions to
industrial class openly in the name of policy. Industrialization too occurred
heavily in few areas such as Gujarat, Maharashtra, Tamil Nadu, Karnataka and
Andhra Pradesh further aggravating interregional disparity,
• The nexus of political class
with industrialists resulted in large scale corruption which started from
Harshad Mehta scam and reached its zenith at 2G, CWG and coal-gate scam.
• Further, the common man was far
from four essential amenities required for financial inclusion namely banking,
credit, insurance and investment. Only 53% of the population had bank accounts prior
to 2014 and had no insurance and credit facilities available to them. Despite
priority sector lending norms by central bank amount of loan disbursed too few
corporate outnumbered vulnerable section of society by huge margin.
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Steps taken by government to fill the gap
• Government through various
schemes has tried to fill the persisting economic gap in the country. Pradhan
Mantri Jan dhanyojna led to revolution in banking sector. It led to large scale
opening of bank accounts along with an health and accidental insurance cover
under Ayushman Bharat Yojana and Pradhan Mantri Suraksha BimaYojna
respectively.
• Further, credit under MUDRA,
Startup India and Stand up India schemes was provided to various sections of
society.
• Old Age pension cover under
Pradhan MantriVayoVandanaYojana to elderly citizens, under Pradhan mantriShram
Yogi Mandhanyojna to unorganized working class, under PradhannMantriKisanMandhan
scheme to farmers and Pradhan MantriLaghuVyapariMandhan to smallnbusiness men
were provided.
Way Forward
• Government must ensure
entitlement and develop basic necessities in form of Rights based approach.
• Government should focus in
improving capabilities.
• Involvement of Corporate social
responsibilities to develop rural based enterprises.
Conclusion:
Various steps taken by government under
various schemes to ensure financial inclusion and social security i.e. is still
to reap its benefits. Also pace of growth is steady and it is moving forward.
However, corruption and crony capitalism are yet the biggest challenges in
front of inclusive growth strategy. To fight it, India must redistribute its
resources equally among different sections of society. It becomes essential for
government India which hosts world’s 14.5 % malnourished and hungry people to implement
these steps effectively in order to attain sustainable development goals by
2030.
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