THE ROLE OF FINANCIAL INCLUSION ON THE ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM INDIA

Abstract

Recent economic growth (EG) has relied significantly on financial inclusion, and scholars and policymakers should pay particular attention to this factor. As a result, the current study looks into how financial inclusion, such as commercial bank branches, depositors with commercial banks, domestic bank credits, and companies using banks for financial investment, impacts the EG in India. Industrialization served as a control variable in the study. The secondary data from the World Development Indicators (WDI) for the period of 1981 to 2020 was utilized in this article. The autoregressive distributed lag (ARDL) model was also used in the study to examine the relationships between the variables. The findings showed a favorable relationship between EG in India and commercial bank branches, depositors with commercial banks, domestic bank credits, businesses using banks for financial investment, and industrialization. The study provides regulators with guidance as they create EG-related rules using efficient financial inclusion.