Does Economic Uncertainty Obstruct the Financial Inclusion Projects of the Central Bank of India

Abstract

Financial inclusion provides swift and economical financial services to the remotest population and helps in generating funds. However, researchers conclude that economic events often obstruct the expansion of financial services. Keeping in view the importance of financial inclusion, the present chapter attempts to investigate how economic uncertainty influences financial inclusion initiatives of the Central Bank of India. Moreover, the chapter also investigates the moderating role of governance on the interconnection of financial inclusion and economic uncertainty. To this end, advanced econometric methodologies are employed to conduct an exhaustive empirical analysis on the dataset from 2000-2021. The empirical outcome infers that high economic uncertainty impedes the financial inclusion. However, when the indicators of governance interact with economic uncertainty, it moderates the negative influence of economic policy uncertainty on financial inclusion. The finding assists in understanding the interrelation of financial inclusion, economic uncertainty, and governance.