Bridge Urban-Rural Gap: A Role Of Financial Literacy And Financial Inclusion In India

Abstract

Background: The Government of Bharat and Regulators (RBI, NABARD, SEBI, PFRDA, SIDBI, IRDAI, etc.) have taken various initiatives to make progress in financial inclusion and financial literacy leading to behavioural change among different sections of a society. These initiatives in the form of schemes (PMJDY, PMMY, PMJJBY, PMGDISHA, PMSBY, Stand-Up India) and programs (FLC, Awareness campaign etc.) presenting year-wise information on beneficiaries however fail to track the cumulative impact and contribution in upliftment of socio-economic condition of marginalized citizen.

Purpose: It aims to identify Regulator’s monitoring role, government schemes contribution in reducing urban-rural divide and socio-economic upliftment.

Methodology: The study uses trend-based approach to analyse cumulative impact of schemes, lay out directional framework (NSFE) and action plan (NSFE) of regulatory bodies and compare the result with Global Findex (World Bank) and National Account Statistics 2024, a major social indicator.

Findings: The result present consistency in scheme’s progress with socio-economic upliftment and Findex improvement over the period. It further presents lack in required behavioural change signifying the need of enhanced financial literacy program. The role of COVID-19 causing heightened health concern has been reflected in inclined insurance participation.

Practical Implications: The necessity of technology adoption in government scheme and enhanced participation of business correspondent is felt. The study sought for more Regulator’s contribution and government support to achieve financial inclusion and literacy.