Press Information Bureau

Government of India

Ministry of Finance

25-February-2011 12:19 IST

Inclusive Development Strategy Focusing on Both Income and Non-Income Dimensions Required Major Financial Inclusion Initiative ‘Swabhimaan’ Launched

As per the Economic Survey tabled in the Lok Sabha, here today, by the Finance Minister Shri Pranab Mukherjee, the development process needs to continuously strive for broad-based improvement in the standard of living and quality of life of the people through an inclusive development strategy that focuses on both income and non-income dimensions. The Survey states that the Central Government expenditure on social services and rural development (Plan and non-Plan) which contributes to human development has gone up consistently from 13.75 per cent in 2005-06 to 19.27 per cent in 2010-11. The Survey also points out that major programmes specific funding is available to the States through Centrally Sponsored Schemes.

The Economic Survey says that inclusive development can be seen in terms of progress in social inclusion and financial inclusion. Despite more than six decades of planned economic development, a large part of the population, particularly segments like landless agricultural labourers, marginal farmers, SCs, STs, and OBCs, suffers social and financial exclusion. Accordingly, the Government’s policies are directed towards economic and social upliftment of these segments so as to enable everyone to reap the benefits of growth.

The Survey states that there is a close connection between social inclusion and financial inclusion. A major financial inclusion initiative was formally launched as “Swabhimaan” on 10 February, 2011 which aims at providing branchless banking through the use of technology. Banks will provide basic services like deposits, withdrawal and remittances using the services of Business Correspondents (Bank Saathi). The initiative enables Government subsidies and social security benefits to be directly credited to the accounts of the beneficiaries, enabling them to draw the money from the Business correspondents in their village itself.

The Survey as regards the North-Eastern States, states that while in terms of some parameters like gross state domestic product, growth and literacy rate the north-eastern states are doing comparatively better, they are still lagging behind in terms of financial inclusion. To improve banking penetration in the north-east, the RBI has asked the state governments in the region as well as banks to identify centres where there is a need for setting up branches or banking facilities. RBI would bear the one time capital cost and recurring cost per annum for a limited period of 5 years under the Viability Gap Funding scheme for the north-east region.

As per the Survey, the achievements under the National Rural Health Mission (NRHM) as on September, 2010 includes selection of 8.33 lakh accredited social health activists (ASHAs), employment of 1572 specialists, 8284 MBBS doctors, 26,734 staff nurses, 53,552 auxiliary nurse midwives (ANMs), 18,272 Paramedics on contract basis and a total of 16,338 Additional Primary Health Centres (APHCs), Primary Health Centres (PHCs), Community Health Centres(CHCs), and other Sub District facilities make functional on 24 x 7 basis.

The Survey says that the achievements under the Sarva Shiksha Abhiyan (SSA) till September 2010 include 3,09,727 new schools, construction of 2,54,935 school buildings, 11,66,868 additional classrooms, 1,90,961 drinking water facilities, and 3,47,857 toilets, supply of free textbooks to 8.70 crore children, appointment of 11.13 lakh teachers, and in-service training to around 14.02 lakh teachers.

DSM/RM/MV/LS-14

Financial inclusion through branchless banking expands access and enables direct crediting of subsidies and benefits. The government's inclusive development strategy links social and financial inclusion, noting increased social-services expenditure and targeted funding through Centrally Sponsored Schemes. The Swabhimaan initiative expands access to basic banking via branchless technology and Business Correspondents, enabling direct crediting of subsidies and social security benefits into beneficiary accounts. For the North-East, the RBI will support establishment of banking facilities by covering one-time capital and limited recurring costs under a Viability Gap Funding arrangement. Complementary achievements in health and elementary education are recorded as supporting inputs to the inclusion agenda.