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The Role Of Finance In The Indian Economy
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India is a country comprising of more than 2 billion people inhabited across twenty-nine states and seven union territories. Districts counting goes to 649 while there are 600,000 villages in the country.
The Indian economy faces a lot of issues as the majority of the population especially staying in rural areas falls apart from the facility of government and easy access to finance suitability. Only 40% of the households have their bank accounts.
The penetration of the finance sector in the Indian economy will help them in improving financial literacy in the industry.
Business services can only grow the economy but enhance the delivery of financial services including banking credit and services at quite an affordable prices for the low-income groups who opt for the exclusion from the same.
Financial Services in India
The financial services in India include access to savings, insurance, payments and other remittance facilities offered by financial systems. The vitality of the financial system is great for economic stability for inhabitants.
India is one of the countries where you will find the development of financial stability is said to quite important for spreading and understanding the importance of financial literacy.
According to Alan Greenspan, an American economist, non-banking financial companies contribute to a larger extent in the growth of the economy as they facilitate innumerable solutions to convert an economy’s overall savings into a capital investment which acts as a support to the Indian economy.
The banking sector is the principal industry taking care of the financial institutions and have experienced a lot of changes with time.
Post liberalization another year which marks its resemblance was 1969 when the nationalization of Indian banks was conducted. The public sector was amalgamated with the banking industry too.
Nationalization of the Banking Industry
Nationalization of the banking industry changed the scenario of economics and have allowed people to come out and practice banking practice in the open.
New policies were being made and executed, and the new institutions regarding advisory and financial were found to have a look at their pace too.
The nationalization of the banking sector has a significant impact on the agricultural sector also. Various plans were about to chalked out for the improvement of the standards of backward sections in society for arranging the credits to start a new business while struggling to get the hold on existing ones too. This depicts that the banking framework triggered the new role of finance in India.
Banking and finance industry has helped the country to rise above the nations and prove their worth to make a reformed statement in the world.
In developing countries like India, various banks are said to be working as a mobilizer of allocators and savings of credit for investment and products and plays an important role too.
Being a financial intermediary the financial institution look forward to contributing to the country’s economic growth by identifying the entrepreneurs with the best chances of taking part in new commercial activities and pursue the allocation of credit to them.
Financial accessibility can boost the economic standards and condition of weak and various poor income population of India. Lack of affordable, appropriate and accessible financial system has always been an issue with the country financial system, and only an effective implementation can improve the economic growth of the country.
The RBI and government are trying hard to source financial inclusion to enhance the banking penetration by the installation of ATMs and execution of finance schemes in the country.
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