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Financial inclusion cannot happen without economic activity: Niti Aayog
New Delhi, Dec 11 (IANS) Questioning the success of the Modi government’s ambitious financial inclusion campaign, Niti Aayog Vice Chairman Rajiv Kumar on Tuesday said it is more about creating jobs and businesses rather than opening bank accounts.
“When talking about financial inclusion, we should try to focus on how many businesses we have created and how much employment was generated in the past few years,” he said at the 15th Inclusive Finance India Summit here, co-hosted by Niti Aayog.
Kumar said there are good and valid figures “to show financial inclusion has improved in our country”, yet “if one was to be honest” one would agree “real empowerment” of poor people and small and medium enterprises is still a long distance away.
“It’s not just deposits and savings but it’s also credit at an affordable cost that implies financial inclusion,” he said at the launch of Inclusive Finance India Report 2018 by ACCESS Development Services, a think tank working on financial inclusion.
Kumar said financial inclusion must start with finding purchasing power among people. Amazed by the Rs 10.5 lakh crore and rising amount of credit to the farming sector, he said he would like to know how this is improving farmers’ disposable income.
“We should not talk about financial inclusion in isolation of the economic activity that we are trying to improve because it cannot be. It cannot achieve one without the other,” he said.
Citing the report, he said 38.5 per cent of the accounts in the country were inactive in 2017, credit ratio (adults taking credit from banks) dropped from 9.1 per cent in 2014 to 8.1 per cent in 2017 and only two per cent used mobile banking.
Instead of focusing on the deposit side, he said the key to financial inclusion is via the credit path which leads to growth, employment and empowerment. Financial inclusion is like the icing on the cake but the cake has to exist, he said.
“Financial inclusion must be about empowerment, job creation and growth, and therefore about credit to the smaller entities who can use capital much more efficiently very often than the large ones can and one of the key things must therefore be that every year at least the share of MSMEs in the credit must go up than in the past,” he added.
He said there should be a different monitoring indicator to measure financial inclusion and a separate way to monitor how credit is improving the purchasing power.
The Inclusive Finance India Report goes a step beyond and questions the government’s counterpoint of Mudra loans in the “jobless growth” debate. Mudra loans, targeted at micro units, is claimed to have created 72.8 million jobs, the report said.
“It was critiqued on account of it being based on proxy indicators like the number of loans rather than on any empirical study. It is critical that the push for financial inclusion be backed by evidence on outcomes – mere financial inclusion numbers do not mean much and any public or private investment has to be subjected to outcome monitoring,” it said.
In the absence of a demonstrated outcome, there is huge room for questions on the validity of this seemingly seamless link between financial inclusion and inclusive development, it said.
“Financial inclusion per se also leaves room for it being termed a neo-liberal ploy to divert attention from the real issues of poverty and inequality,” the report said.
It went on to add that the loan amount under the Shishu category of Mudra loans may not be sufficient for creation of full-time employment for even one person. Financial inclusion is a means and should not become an end in itself, the report said.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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