Financial inclusion in India: An axiomatic approach

Satya Chakravarty and Rupayan Pal

Journal of Policy Modeling, 2013, vol. 35, issue 5, 813-837

Abstract: In this paper we first develop an axiomatic measure of financial inclusion. This measure is readily implementable and useful to determine policy priorities to promote financial inclusion. Next, we demonstrate that supply side data on banking services can be usefully employed to measure financial inclusion. Third, we examine the effects of major banking policies on financial inclusion across states in India during 1972–2009, using panel data econometrics techniques. We find that the social-banking policy has played crucial role to foster financial inclusion across states in India during 1977–1990. Thereafter, the move toward pro-market financial sector reform has adversely affected the pace of financial inclusion. This paper identifies geographic penetration of banks and credit availability as two policy targets to foster financial inclusion in India.

Keywords: Financial inclusion; Axioms; Index; Social banking policy (search for similar items in EconPapers)
JEL-codes: G00 G21 G28 O16 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (79)

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Working Paper: Measuring financial inclusion: An Axiomatic approach (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:35:y:2013:i:5:p:813-837

DOI: 10.1016/j.jpolmod.2012.12.007

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