Financial Inclusion in Rural Development

R Muthulakshmi


Rural development generally refers to the process of improving the quality of life and economic well-being of people living in relatively isolated and sparsely populated areas. Rural development has traditionally centred on the exploitation of land-intensive natural resources such as agriculture and forestry. However, changes in global production networks and increased urbanization have changed the character of rural areas. Meanwhile, promoting development in rural areas is a slow and complex process. It requires simultaneous action in various sectors, where an environment undergoes rapid and sometimes, volatile change. The change comes from internal as well as external processes such as privatization and globalization, by forces appearing to be scattered and disparate (Bauman, 1998). What is the role of rural societies in this change? Just adjust to a rapidly changing and highly competitive international economy (World Bank, 2005) or to have a more innovative and proactive role? India is in the midst of a transformation to a network economy with a shift from markets to networks, from quantities to qualities, from commodities to niche, and from supply-driven to demand-driven large chains. The new developments have provided opportunities for small farmers too. Some of them are linked to supermarkets (at least in certain products). However, the process is uneven. Financial inclusion policy priorities are identified primarily with a view to boosting growth in average material living standards as measured by GDP per capita. This has been the hallmark of ‘Going for Growth’ since its launch. The ultimate aim, however, is a genuine and broadly-shared improvement in living conditions, which implies that stronger growth in average income does not come at the expense of other important aspects of well-being. Hence, the researcher is interested to reveal the income, saving and expenditure of rural areas, how far the financial policy reached the study area and to examine the role of financial inclusion policy in rural development.

Aus. J. Acc. Eco. Fin. Vol 2(1), April 2016, P 49-56


Rural Development; Financial Inclusion Policy; Savings; Village

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