Odisha has witnessed remarkable progress in financial inclusion of females, thanks to efforts by the government and banks. The trend is expected to continue. Increased employment and income opportunities, coupled with proper financial literacy, will catalyse the process.
Dr. Manas R Das
Financial inclusion process which began in India in 2005-06 and was later powered by the Prime Minister Jan-Dhan Yojana in 2014 has witnessed bank depositors and deposits soaring, especially related to small accounts. In this regard, females are on equal footing with males. The State of Odisha provides an illustrious case in point, as the following evidence reveals.
During 2014-19, both by accounts and amount, females posted substantially higher Compound Annual Growth Rates (CAGRs)at 13.5% and 14.9% respectively than males at 11.7% and 13.0% respectively.
During 2014-19, while by accounts, the share of females in the total jumped by 158 bps to 27.1%, by amount, the share jumped by 154 bps to 26.9%. Correspondingly, the relative shares of males declined.
During 2014-19, the average amount per account in respect of females rose by 6.1% to a littleover `28,500, whereas the same in respect of males increased by 6.3% to nearly`29,000.
The marginally lower average amount in respect of females could be attributed to a significant jump in the accounts (probably with small amounts)opened duringthis period.
Odisha vs.Eastern Region
During 2014-19, in terms of accounts, females in Odisha posted a CAGR of 13.5% which was 515 bps below that for the eastern region (excluding Odisha). However, by amount, the CAGR at 14.9% was just 15 bps below that of the region (excluding Odisha). Consequently, over the six years, by accounts (females), the share of Odisha in the region fell by 290 bps to 14.0%, whereas by amount (females), it remained unchanged at 14.0%, albeit with a nominal fall.
Considering the average amount per account(females), Odisha lagged behind the eastern region (excludingOdisha). However, the gap between the two narrowed down,visibly, during 2014-19, with Odisha experiencing anincrease of 6.1% as against the eastern region (excludingOdisha) decliningby14.4%.
Odisha vs. All-India
At March-end 2019, by total accounts an amount (females), Odisha ranked 15th each among 29 States.
During 2014-19, both by accounts and amount, the CAGRs posted by females in Odisha exceeded the corresponding values for the country (excluding Odisha)by 100 bps and 239bps respectively. As a result, both by accounts and amount(females), the share of Odisha in the countryrose by 11 bps and 19 bps respectively to 2.6% and 1.9% respectively.
In terms of the average amount per account(females), Odisha lagged behind the country (excluding Odisha); however, the gap in the value between Odisha and the country(excluding Odisha)decreased. While the former experienced a rise of 6.1%, the country (excluding Odisha) reflected a slight decline of0.1%.
In a nutshell, Odisha has witnessed remarkable progress in financial inclusion of females, thanks to efforts by the government and banks. The trend is expected to continue. Increased employment and income opportunities, coupled with proper financial literacy, will catalyse the process.
Note: All data used are from the RBI publication “Basic Statistical Returns for Scheduled Commercial Banks” (2014 and 2019). bps – basis points.
About the Author:Dr. Manas R. Das is a former senior economist of State Bank of India. He has over 30 years of experience as an economist in two large commercial banks. Academically, he is a gold medallist in Bachelor of Arts with Economics Honours from Utkal University, followed by Master’s in Economics from Delhi School of Economics and Doctorate in Economics from Gokhale Institute of Politics and Economics. He is also a Certified Associate of Indian Institute of Bankers. He has won several awards, besides being a prolific writer.