New Delhi - Minister of State for Finance Arjun Ram Meghwal said a total of Rs 8,277 crore had been disbursed by way of loans to 38,477 people under the "Stand-Up India" initiative till mid-August.
The initiative was launched on April 5, 2016 to promote entrepreneurship among Scheduled Castes, Schedule Tribes and women by extending bank loans between Rs 10 lakh and Rs 1 crore.
"By mid-August, 38,477 people were given loans up to Rs 8,277 crore, out of which 31,000 were woman and given loans up to Rs 6,895 crore," Meghwal said in an article on "Financial Inclusion in Rising India".
He said to further strengthen financial inclusion in the country, the government had advised banks to deploy micro ATMs in rural areas and consequently, 1,14,518 micro ATMs were deployed by December 2016.
According to him, lack of financial inclusion is costly for the society as well as the individual.
"As far as the individual is concerned, lack of financial inclusion forces the unbanked into informal banking sectors where interest rates are higher and the amount of available funds much smaller. Because the informal banking structure is outside any legislative framework, any dispute between lenders and borrowers cannot be settled legally," he said.
"As far as the social benefits are concerned, financial inclusion increases the amount of available savings, increases efficiency of financial intermediation and allows for tapping new business opportunities," he added.
Scope of the financial inclusion was not limited to only banking services but it extended to other financial services as well, like insurance, equity products and pension products, he said.
Financial inclusion helped the country increase the rate of "capital formation", which in turn, gave a push to the economic activities in the economy by channelising the money from every nook and corner of the country, Meghwal noted.
"In the absence of people of a country financially included in the mainstream, they often tend to park their savings/ invest in the non-productive assets like land, buildings and bullion. While financially included people can easily avail the credit facilities, whether they are sitting in the organised or unorganised sector, urban or rural sector. Micro Finance Institutions (MFIs) are the classic examples for providing easy and affordable credit to poor."
Financial inclusion also helps government plug gaps and leakages in public subsidies and welfare programmes, as the government can directly transfer the subsidy amount into the account of the beneficiary rather than to subsidise the product.
"The government has even saved by around more than Rs 57,000 crore in its subsidy bill and has ensured that the benefit of the subsidy reaches to the real beneficiary directly," the minister said.
One of the most crucial of the several steps taken by this government is evolving the concept of JAM -- Jan-Dhan, Aadhar and Mobile.
In this regard, he named government initiatives, including Pradhan Mantri Jan-Dhan Yojna, and insurance and pension schemes -- Pradhan Mantri Suraksha Bima Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojna, Atal Pension Yojna, Varishtha Pension Bima Yojana and Pradhan Mantri Mudra Yojna.
"The government is committed to its target of increasing the inclusion of every household in the financial system, so that the masses can get all the legitimate benefits arising out of the growth of the country and in turn, the funds mobilised from the people not earlier in the formal channel could also be brought in the formal channel, thereby giving the economy of the country an extra thrust to lead the path of growth," he said.