Financial inclusion is a major priority of policymakers in India What can be the direct and indirect...........

Economic Affairs Others

Financial inclusion is a major priority of policymakers in India. What can be the direct and indirect benefits of financial inclusion?

Cutting down investment in non-productive assets such as Gold
Sustainable economic growth
Reduction in the influence of informal and exploitative lending sources
Increase in domestic savings base

Select the correct answer using the codes below.

2 and 3 only

1, 2, 3 and 4

1, 3 and 4 only

2 and 4 only

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Explanation:

Statement 1: Many invest in Gold due to lack of alternative investment instruments. Post-financial inclusion, an investor has a greater repertoire to choose from and thus investment in Gold reduces.

Statement 3: As people get access to institutional finance such as banks etc., demand for exploitative money lending usually reduces as people resort more towards formal sources.

Statement 2 and 4: Increase in availability of finance leads to increase in institutional deposit and access to finance for small businesses, agriculture, retail investors etc.