Does financial inclusion stimulate India's economy : a panel data analysis

The study empirically examines the connections between three different measures of financial inclusion with output growth across the states of India. Applying the panel co-integration and error correction model for 26 states and 4 union territories, it concludes that all three measures of financial development with gross fixed capital formation enhance real net state GDP significantly in the long run. Further, a significant reduction in the real net state GDP is also observed during the Global Financial Crisis. This study is important for the Indian policymakers to formulate effective financial inclusion policies leading to the overall development of the Indian economy.