Nexus of Financial Inclusion and Economic Growth: Benchmarking the Performance of Indian States

Anup Yadava, Bhanu Pratap Singh and Vishal Yadav

MPRA Paper from University Library of Munich, Germany

Abstract: The study evaluates and benchmarks the performance of Indian states considering the proposed multidimensional financial inclusion index (FII) as input and economic growth as an output variable. The HDI methodology of UNDP is adopted in the construction of supply and demand side FII for 27 Indian states for the period 2004 to 2017. The output-oriented DEA models are used in which supply and demand FIIs are used as an input and real gross state domestic product as an output to measure the technical efficiency of the states. The major findings of the study suggest Maharashtra performs at the frontier and benchmarks for all other states in both CRS and VRS DEA models which is consistent with FII indices of the states. Therefore, structural reforms are warranted in the policy framework to improve financial services in poor and low performing states to spur economic development.

Keywords: Financial inclusion; Multidimensional Index; Data Envelopment Analysis, Benchmarking, Economic Growth (search for similar items in EconPapers)
JEL-codes: G0 O10 O40 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eff, nep-fdg and nep-fle
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108479

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