The extent of financial inclusion through MGNREGS: a district level analysis in West Bengal, India

Abstract

PurposeMahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) launched in the year 2006, with the pursuit of the objective of removing poverty and unemployment and thus address the issue of financial inclusion. The performance of the programme across the states in India has not been uniform. The purpose of this study is to focus on the financial inclusiveness features associated with MGNREGS program across the selected districts in West Bengal in the years of recent past.Design/methodology/approachIn this study, financial inclusion index has been developed by consideration of four indicators with the help of principal component method. Fixed effect regression model has been applied to explain the impact of relevant determinants on financial inclusion index.FindingsIt is observed that out of 19 districts, seven districts registered an increase in the value of the financial inclusion index in the year 2019 compared to that in the year 2013. The empirical analysis for identifying the determinants of overall inclusion reveals that factors like households having active job card, utilization of fund, amount of labour cost and number of works have significant influence on financial inclusion.Originality/valueThe study widely discussed how the scheme was helping in promoting financial inclusion by providing wage payment through banks and post offices accounts. The author has also tried to highlight some of the difficulties in accelerating the speed of financial inclusion when banks and post offices are used as a means for wage payment and finally provide remedial measures that could be taken to tackle these problems.

Exploring the socio-economic attributes of financial inclusion in India: a decomposition analysis

“…In the Indian context, access to formal finance in rural areas has increased after implementing flagship programmes like PMJDY and Mudra schemes (Barik and Sharma, 2019). Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) also played a positive role in increasing financial inclusion (Singh, 2021a). But there is still scope for improvement in financial literacy and FinTech.…”

Does Social Welfare Programmes Influence Households Trust in Local Administration and Their Political Participation? Evidence from the MGNREG Scheme in India

“…Empirical studies have shown the positive welfare impact of the MGNREG scheme on income, nutritional intake, access to non-financial assets, adolescents' school attendance, food security, savings and mental health (Deininger & Liu, 2019;Klonner & Oldiges, 2019;Muralidharan et al, 2017;Ravi & Engler, 2015). The evidence of the positive outcome of the MGNREG programme in terms of increased agricultural wages, generating environmental benefits, pacification of Maoist conflict violence, reduction in short-term migration, empowerment of rural women and financial inclusion is also available in earlier studies (Berg et al, 2018;Das, 2015;Dasgupta et al, 2017;Esteves et al, 2013;Pankaj & Tankha, 2010;Saibal, 2017;Singh, 2020). However, some researchers find corrupt practices followed by the local administration in implementing this programme (Afridi et al, 2017;Banerjee et al, 2020;Imbert & Papp, 2011;Mathur, 2017;Niehaus & Sukhtankar, 2013a, 2013bRavallion, 2019;Shankar et al, 2011).…”

Financial inclusion as a tool for sustainable macroeconomic growth: An integrative analysis

“…A thriving financial system, particularly one that links individuals to banking services, is critical for the economic success of developing nations. Banking is essential because it creates an environment conducive to investment by making credit readily available, encourages individuals of all income levels to put money aside for the future, and boosts individual agency by facilitating more responsible financial management (Singh, 2021).…”

“…When everyone has access to financial services, it is thought that their combined efforts will have a faster and more significant influence on macroeconomic growth (Sha'ban et al., 2020). Examining the link between macroeconomic growth and related variables; for example, via microcredit, the financially excluded can take an interest in self‐employment and the development of both skilled and unskilled employment for others, improving access to financial services for a greater proportion of the population may aid in reducing income inequality, poverty alleviation, and several other things; Investigating the relationship between macroeconomic growth components and macroeconomic growth with a focus on the creation of opportunities such as job creation, access to finance, and government policies of different economies to promote financial literacy; promoting financial inclusion is important because it provides the financially excluded with a consistent income and livelihood, which in most cases has a positive impact on the overall well‐being of the population (Kim, 2016; Ozili, 2021; Singh, 2021). …”

“…Investigating the relationship between macroeconomic growth components and macroeconomic growth with a focus on the creation of opportunities such as job creation, access to finance, and government policies of different economies to promote financial literacy; promoting financial inclusion is important because it provides the financially excluded with a consistent income and livelihood, which in most cases has a positive impact on the overall well‐being of the population (Kim, 2016; Ozili, 2021; Singh, 2021).…”