What is Financial Inclusion:-
Financial inclusion means providing financial services to the weaker sections of society. It also ensures that financial services meet them at affordable cost. According to rural needs, deposits and withdrawals and loan facilities provided by banks are kept in the purview of financial services, but today accidental or life insurance and pension have also been included in this purview.
When Concept of financial inclusion got importance: –
The importance of financial inclusion began to grow from the year of 2000, because people started to open their account in the bank to start self-employment or get employment in micro industries. In the absence of financial awareness in rural areas, people were living a difficult life.
Bank’s contribution in financial inclusion: –
In the financial year 2016-17, a report of NABARD’s, All India Financial Inclusion Survey was published, according to which 88.1 per cent of rural households and 55 per cent of the farming families had a savings account. On average, each family was saving 17,000 rupees annually. 52.5 per cent of the farming families and 42.8 per cent of the families engaged in farm labour were in debt. 26 per cent of the families associated with agriculture and 25 per cent of the families engaged in farm as agriculture labourer were enjoying the facility of insurance, while 20.1 per cent of the farming families and 18.9 per cent of the families of agricultural labourers were taking advantage of pension. According to this survey, the annual average income of the farming family was Rs 1,07,172 and the average annual income of the farm labourers was Rs 87,228.
Clearly, the large chunk of the rural population is still not transacting with the bank. Due to limited duration of work in banks, inadequate availability of alternative channels, etc., villagers are not taking benefit of financial services. In order to connect the villagers to the banks, many mini banks are being opened in rural areas, known as Customer Service Point (CSP). These mini banks are being provided facilities like deposits, withdrawals, inquiries regarding their accounts etc. to rural customers. More than 58,000 business correspondents (BCs) and CSPs of State Bank were working across the country till March 31, 2018. BC’s work is to bring financial awareness among the villagers and provide them banking facilities at their home. Banks are also providing alternate channels such as ATMs, internet kiosks etc. to the villagers.
State Bank of India has more than 58,000 ATMs across the country; most of them are in rural areas. By March 31, 2018, the number of point-of-sale across the country was 31 lakhs, while 86.18 crore debit and credit cards had been issued. State Bank is providing about 80 per cent of the services through alternative channels such as Internet, Mobile, ATM etc. In the year 2018, there were 2.22 lakh ATMs across the country.
With the availability of mobile towers, electricity and phones in villages, the villagers are now using technology based banking products, but the number of such villagers is still low.
Pradhan Mantri Jandhan Yojana facilitated financial inclusion: –
Pradhan Mantri Jandhan Yojana was started on August 15, 2014, and on August 28, the work of implementing this scheme was started. Under this scheme, facilities like life insurance, opening zero Balance account, sanctioning loan, Issue Rupay card, SMS etc. are being given to the common man. Till December 5, 2018, 33.44 million accounts were opened by all the banks, of which Rs 84,815 crore was deposited. 26.44 lakh Rupay cards were also issued in these accounts. Rupay card is an ATM card, also called debit card. By the help of this card, withdrawal of money, transfer of money, enquiry of accounts, payment of bills, shopping from point of sale, online shopping, etc. benefits are being enjoyed by villagers. Under the Prime Minister Jandhan Yojana, due to the opening of accounts of the villagers in large numbers, the government is directly transferring the money received from various government schemes through direct benefit transfer (DBT) in their account, thereby reducing the role of middlemen. Along with this, corruption has also been reduced by this measure. The spread of Pradhan Mantri Jandhan Yojana is mainly in rural areas. With the launch of this scheme, the rural people are easily open accounts in banks, because the Know Your Customers (KYC) has been simplified to make this scheme successful. The bank is also providing the facility of overdraft to the villagers who operate the account. Under the facility, customers are allowed to withdraw a fixed amount from the account on the basis of satisfactory transaction.
Role of Mudra Loan in implementing financial inclusion: –
After the introduction of the Prime Minister’s Mudra Loan Scheme, small businessmen like Rehadiwale, Khomchevale, Fariwale etc. have opened their accounts in the bank for taking the benefit of this scheme. There are public Sector banks (PSUs) in the forefront in disbursing Mudra Loan. The second place is of private bank and Micro Financial Institution (MFI). In the year 2018, accounts of 4.88 million Mudra Loan beneficiaries were opened. The number of beneficiaries was 70 per cent, while 23 per cent belonged to Scheduled Castes and Scheduled Tribes and 32 per cent of the Backward Class. Rs 2,53,677 crore was sanctioned in these accounts and Rs 2,46,437 crore was distributed among the beneficiaries. In the financial year 2018, among 4.81 crore beneficiaries, a large number were small traders. During the financial year 2019, till December 7, 2019, 2.81 crore accounts were opened, out of which Rs 1,48,503.57 Cr. was sanctioned and Rs.1,42,009.91 Cr. were distributed among beneficiaries.
Employment Generation from MNREGA: –
To provide employment to the villagers, the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MNREGA) program is being run by Ministry of Rural Development, Government of India. Till December 15, 2019 as many as 11 crore 63 lakh workers were working under this scheme, whereas the total number of workers involved in this scheme was 25.55 million. The spread of this scheme is in 691 districts and 6918 blocks in the country. Under this scheme, 12.89 crore Job Cards have been issued so far. Since the beginning of this scheme, a total of Rs 4,95,535.52 crore has been given as wages, while the number of beneficiaries benefitting from this scheme till December 15, 2018, is 4.36 crore.
Participation of youth in the development of rural areas: –
The definition of the age of young people in India has been changed from time to time. At present, 15 to 34 years of age are considered as young people. According to this definition, in 2011 census, the population of youth in India was 42.19 crore, in which the number of men was 21.75 Cr. and the number of females 20.44 crore. In 2011, the total population of the country was 121.09 crore. Thus, the youth in India was 35 per cent in 2011, in which about 70 per cent were rural youth and the remaining 30 per cent urban youth. According to the Agriculture Census of 2011, approximately 61.5 per cent depend on rural agriculture. The percentage of marginal families having less than one hectare of agricultural land decreased from 62.9per cent of 2001 census to 22.5 per cent in the 2011 census. The role of agriculture in the Indian economy is very important. Its contribution to GDP is approximately 17 per cent and it is an area providing employment to more than 60 per cent of the rural population.
Conclusions: –
At present, rural youth do not have many options to fulfill their dream. For them, starting self-employment or getting employment is the most important aspect for living. Depending on traditional agriculture, they cannot get two times meal. For this, it is necessary that they cultivate farming by doing the latest way or by doing small business. With opening accounts in the bank, they can avail loans, can insured crops, take benefits of government schemes etc. To Connect the rural youth with the bank is one of the most important and effective solutions of various rural problems.
By-Satish Singh
(Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of AFTERNOON VOICE and AFTERNOON VOICE does not assume any responsibility or liability for the same.)
