December 8, 2023

Day-21 Answer Writing Challenge : Model Answer

Question: Financial inclusion plays a significant role in achieving economic growth. What steps have been taken to further financial inclusion? (8 marks, 120 words)


  • Financial inclusion refers to the provision of financial services and goods at a cheap cost to excluded members of our society and low-income groups.

Initiatives to increase financial inclusion in India-

  • The Government of India Financial Inclusion Campaign-“Pradhan Mantri Jan-Dhan Yojana” (PMJDY)-
  • Banks in the state have provided each family with at least one Basic Saving Bank Deposit Account (BSBDA).
  • As of September, 2022, banks have 17.33 lakh accounts under the initiative, 15.40 lakh of these accounts are in rural regions, while 1.93 lakh are in urban areas.

Universal Social Security Initiatives under PMJDY Scheme-

  • Pradhan Mantri Suraksha Bima Yojana (PMSBY)-
  • Offers a renewable one-year accidental death cum special ability cover of ₹2.00 lakh (₹1.00 lakh for partial and permanent special ability) to all saving bank account holders between the ages of 18 and 70 for a premium of ₹20.00 per annum per subscriber, renewable on 1st June of each year.
  • Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)-
  • offers a renewable one-year life cover of ₹2.00 lakh to all saving bank account holders aged 18 to 50 years, covering death due to any cause at a premium of ₹436.00 per annum per subscriber, renewable on 1st June of each year.
  • As of September, 2022 banks have 6.25 lakh customers through this plan.

Pradhan Mantri MUDRA Yojana (PMMY)-

  • Implemented across the country, including in Himachal Pradesh.
  • Smaller micro firms are non-farm enterprises in Manufacturing, Trading and Services with credit demands of less than ₹10.00 lakh;
  • All loans made to these sectors for income creation are known as MUDRA loans.

Financial Awareness and Literacy Campaigns-

  • It is very important in reaching to the target populations.
  • Banks in Himachal Pradesh are implementing financial literacy campaigns through Financial Literacy Centers (FLCs) and bank branches.

NABARD led initiatives-

  • NABARD has sanctioned a support of ₹3.41 crore in FY2022-23 upto 31st December, 2022 to various banks throughout the State for spreading Financial Literacy through Financial and Digital Literacy Camps.
  • NABARD has sanctioned ₹1.95 crore to UCO Bank and ₹ 2.34 crore to Punjab National Bank for establishing 5 and 6 Centres for Financial Literacy (CFL), respectively.
  • Besides this, NABARD has also initiated to spread Financial Awareness through Media.
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