REALISING THE SIGNIFICANCE OF SOCIO-ECONOMIC TRIGGERS OF FINANCIAL INCLUSION IN INDIA

Financial inclusion has moved up the global reform agenda and become a topic of great interest for policy makers, regulators, researchers, market practitioners and other stakeholders. It is a key enabler of economic and social development in developing countries like India. The process of financial inclusion is a function of number of variables. It is necessary to identify the determinants of financial inclusion so that appropriate policy measures can be undertaken to achieve the larger aim of financial inclusion. This paper attempts to examine the association between the extent of financial inclusion and socio-economic variables, using a panel data set
for Indian states over the time period 2001-2012. For this analysis, five socio-economic variables viz. income, employment, literacy, urbanisation and caste have been considered. The findings indicate that all the variables are significant in explaining the extent of financial inclusion. This paper, therefore, calls for policy making bodies to put in place a financial inclusion framework in order to improve the level of financial inclusion.