Charting India’s Path to Inclusive Growth

Session Report
Samprikta Banerjee

A One-Month Immersive Online Intermediate Certificate Training Course and Online International Autumn School Program on, Contours of the Public Policy in India in the Amrit Kaal was conducted by the Center for the Study of Finance and Economics (CSFE), IMPRI, Impact and Policy Research Institute, New Delhi from September 1 to September 30, 2023.

On Day 5, there were three speaker sessions lined up, the second one being India’s Recent Policies Towards Financial Inclusion by Prof Aman Agarwal, Professor of Finance & Vice-Chairman, Indian Institute of Finance (IIF), Greater Noida. He began his session with greetings to the chair, the moderator and IMPRI.

He started his session with a presentation that contained his talking content which included India’s Growth Story, Union Budget 2023-24, Financial Inclusion, World Economic Rankings, Digital Rupee and the G20 Summit.

Indian Growth Journey

Many situations have stagnated India’s growth in the past like the change of political parties, the World Economic Crisis of 2007-08 and conflicts between ministries and structures. However, the current government has already succeeded in achieving heightened growth more than any other government due to its single stand framework since 2014 which was looking at the growth component extensively. 

To understand the Indian History of Growth he fleetingly mentioned the golden civilisations like the Harappan Civilisation, practices like the Introduction of spice and woollens to Europe and important personalities like Chanakya and his Arthshastra.

Socially, India has been the land of culture, languages, religion and society with a young population and agro and agro-based industry turning out to be the primary industry in India. Since its past India has had a specific domestic orientation and financial institutions like the central bank along with monetary policy. However, the many disconnects between the ministries and the central bank hindered effective policy implementation in older India.

However, in comparison India today, has its own challenges to look up to but most of them are under control and a maximum of them have been addressed with significant progress. The major milestones leading to India’s current growth have been the five-year plans, NITI Aayog, improvement of the service and stock market sector, agricultural economics and utilising the thought process of Generation Z and the millennials.

International forces lately have also acted as major pushes to India and in some ways led India to take its own stance in difficult situations making its voice heard on the world stage. Mastercard and Visa played their own essential role in strengthening the Indian financial sector and the network connectivity they have been able to create to the last mile. Hence, he rightfully states that although the Ukraine-Russia War created worldwide problems, it created opportunities for India to create its own structure and influence growth becoming a major food security country like many other countries in the world. The positive note is the strengthening of the financial framework. 

The main part of this government’s agenda wherein it has been able to push India forward has been the idea of fostering sustainable development which basically included driving interconnected and interdependent development in arenas of technology, environment and human capital together, the agenda of which has been harped since the 2002s but finally implemented in the recent years.

He took the examples of the recent Nobel prize winners and stated how the relationship between labour markets, financial growth and structure and human well-being has come out as contemporary discussion topics and how intertwining them is important. He states that the government of India has been influenced by these modern ideas leading to success in various policy implementations and frameworks in the form of Jan Dhan Yojana, Ujjwala Yojana, etc. He clearly states that though the creation of the pathway to development had been done by the previous governments, effective deliverance was lacking which this government took up.

India hence has had mutual respect since early times and almost every country has either a friendly or neutral attitude towards this country, hence it should try to maintain the glory attained by addressing the challenges of technological advancement, infrastructure enhancement, sustainable harmonious growth, international confidence and youth.

Union Budget 2023-24

The Union Budget last year and this year are almost continuations to each other in that this budget also speaks about transparency, accountability and sustainability like the previous one. The Short-run curves ultimately lead to the Long-run phenomenon due to which Budgets not only should be framed for today but be able to make projections for tomorrow and that is where there is an importance to look at its direction which this government has been able to provide.

Hence, we are seeing progress and inclusive growth in many matters like national security, healthcare, women, social welfare, etc. as budget allocations have been individually provided to foster growth in the lagging areas by promoting development in the connecting basic needs like agriculture and education.

Financial Inclusion

Financial has been on India’s growth agenda for many decades and is not something new however, the past 20 years have seen higher documentation of the levels formally where it has been visible that the last mile person is not benefitting at the end of the day and that is where the importance of FinTech come into picture.

FinTech has the potential to support growth and poverty strengthening financial development, inclusion and efficiency. However, there needs to be a check here too considering the fact that it can pose risks to consumers and investors in the aspect of financial stability and integrity in the absence of supervision and regulation. He explained its underlying importance with the example of how demonetisation digitised the financial sector like nothing ever could and even vendors and marginalised sellers use UPI nowadays and actualised the idea of plastic and digital money prevalence.

However, he also gives a reality check that India has not moved up by leaps and bounds in terms of FinTech vertical space and was at 98th rank according to the study conducted by him but it has definitely moved swiftly in this field in the last few years creating a strong base for further development in this field.

The achievement lies in the fact that teenagers to the elderly, marginalised to the rich, almost everyone is relatively much more enthusiastic about digital money and has put their trust in this form of system rather than in previous years when the population was unsure about digital and plastic money frameworks would actually pan out. This is what financial inclusion looks at and this is actually a good start for India.

Now, he answered the question of what actually led to financial exclusion and the main reasons lie in problems like lack of surplus income, lack of requisite documents, lack of trust in the system, high transaction costs, remoteness of service provider, poor quality of services rendered and not suitable to customer’s requirements. The problem was rightfully identified and strategic planning was made to deal with it which led to the formation of the National Strategy for Financial Inclusion from 2019-2024 to try and obliterate as may identified problems as possible.


He concluded his session appreciating the idea of trying to serve the underprivileged, the very last person in the queue and fostering human-centric and inclusive development with inclusive, ambitious, decisive and action-oriented planning.

He stated how India has prospects to Wings to India@100 if it identifies its shortcomings and keeps moving in the right direction. A few striking planning successes included adding wings to the economic growth and development post-Covid-19 with the digital revolution in agriculture, healthcare, education, jobs, MSME, Banking, etc. and focusing on macroeconomic and microeconomic level inclusive welfare to frame the Bharat of tomorrow in order to induce employment, financial development and ease inflationary pressures.

In his opinion, India’s GDP has the potential to grow by 9.2%(Achieved in 2021-22) and even higher if it sustains to keep the fiscal deficit under control and focus more on jobs and growth economy for seeing prospects in growth. Lastly, trust and confidence are the key to an kind of growth and development which our PM highlighted on with stress during the G20 Summit.

He ended his session with an insightful and interactive Q&A round.

Acknowledgement: Samprikta Banerjee is a research intern at IMPRI.

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