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Day 29 – Q 2. Can a digitally backward India ensure financial inclusion? Examine.

2. Can a digitally backward India ensure financial inclusion? Examine.

क्या डिजिटल रूप से पिछड़ा भारत वित्तीय समावेश सुनिश्चित कर सकता है? जांच करें।


  • Financial inclusion may be defined as 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 affordable cost (The Committee on Financial Inclusion, Chairman: Dr. C. Rangarajan).
  • Financial Inclusion, broadly defined, refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity products (The Committee on Financial Sector Reforms, Chairman: Dr.Raghuram G. Rajan).
  • India’s commitment to financial inclusion goes back several decades and has been led by the Reserve Bank of India (RBI) and the Indian government through broad initiatives. Digitisation is one of the such initiatives and one of the most important tools to achieve 100% financial inclusion.

Digitisation in India:

  • Though a substantial number of people have mobile phone in India but internet penetration is still low around approx. 60% in Urban and less than approx 40% in rural India.
  • Another important requirement for digitisation is Digital literacy which is, even though we have programs like Digital Saksharta Abhiyan, quite low in India.
  • Electricity is one another important factor in digital penetration, though we have one going and successful programmes like Saubhagya.
  • On infrastructure front, we have Bharat Net scheme to connect all panchayats with optical fibre network, which is being delayed by years to complete.
  • All the above mentioned programmes are working on to increase digital penetration in India, still due to huge population, poverty and red-tapism, India is categorized as digitally backward, though coming out of rapidly.

Financial inclusion in digitally backward India:

  • Though, digitisation is one of the important requirements, but not panacea for financial inclusion.
  • JAM trinity already brought substantial number of Indians under banking network.
  • We also have banking correspondent agents, working as Bank Mitras. These individuals take the banking services to last person of the rural area.
  • Mobile banking, banking through post offices and using existing infrastructure and manpower India is achieving 100% financial inclusion rapidly and in a unique way.

Way forward:

  • Despite the low digital literacy and penetration, initiatives taken by the government for financial inclusion are not in vain. We have achieved laudable success.
  • To achieve further more and inclusive targets, infrastructure such as digital infrastructure and 24by7 electricity are some of the important areas needed to be focused more.
  • Poverty is both cause and effect of financial deprivations, so it needed to deal in both ways.

Best Answer: Shri

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