Initiation of Financial Inclusion in Rural India- a Conceptual Analysis

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Initiation of Financial inclusion in rural India- A conceptual analysis P.Ramalingam, M.Com, Mphil, MBA, NET-JRF[1]
Introduction:
India is living in rural areas said by father of our nation. But, the peoples who are living in rural areas not really lived and they are constrained to live with some socio-economic factors. Even though, India is fast growing country as compared with rest of world in all respects except economic status of people. Beginning with First Five Year Plan in 1951, resources were deployed on areas like irrigation and energy, agriculture and community development, transport and communications, industrial development, social services, land development and infrastructure. Initially, the growth rates were around 3-4 per cent which gradually touched a peak of over 9 per cent. Despite economic turbulences, financial scams, population growth, natural calamities, wars, political disturbances, India witnessed several achievements in many areas in the last six decades. But still, there are people who are ignored by banks and financial institutions to get financial services and benefits. It is very important issue before the government to make them inclusive. So, the Reserve Bank of India has set up a commission (Khan Commission) in 2004 to look into financial inclusion and the recommendations of the commission were incorporated into the mid-term review of the policy (2005–06). In the report RBI exhorted the banks with a view of achieving greater financial inclusion to make available a basic "no-frills" banking account. The Eleventh Plan (2007-12) document was divided into three volumes viz., (I) Inclusive Growth (II) Social Sector and (III) Agriculture, Rural Development, Industry, Services and Physical Infrastructure. It addresses on sustained growth and investment aiming at improvement in the quality of life. The percentage of population below the poverty line has come down from 36% in 1993-1994 to 28% in 2004-05 while defining the income level at Rs. 10 per day. This is disappointing since this line was fixed in 1973-74 when per capita incomes were much lower. Objectives of the study:

This is an attempt to justify the following objectives of the study: 1) To explore the basic understanding of financial inclusion concept in rural India. 2) To recognize the reasons for financial exclusion especially in rural areas 3) To find the peoples who are financial excluded so far

4) To quantify the expectations of financially excluded people. Statement of the problem:
The present study is an attempt to create awareness about financial products and services among rural people with suitable guidelines to promote their superior livelihood like urban people. But, it is not so easy to make them inclusive to enjoy the products and services of banking sectors. The government should take necessary legal frame works and actions to achieve the inclusive growth of rural people and make them to understand the concept of financial inclusion, reasons for exclusion, products and services and expectations of excluded people. This study will give the clear picture with survey from a village of moganapalayam, thiruvannamalai district, Tamil Nadu.

Financial inclusion:
According To United Nations, "A financial sector that provides 'access to credit for all "bankable” people and firms and to savings and payments services for everyone. Inclusive finance does not require that everyone who is eligible use each of the services, but they should be able to choose use them if desired. As Per “Treasury Committee, House of Commerce, UK, (2005) “Ability of individuals to access appropriate financial products and services.” Report of the Committee on Financial Inclusion in India (Chairperson: C. Rangarajan) (2008) "The process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an...
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