Initiatives and Imperatives

The relationship between financial development and economic growth is well documented in the economic development literature. More recently, the debate has expanded to include financial inclusion as a necessary condition for sustaining equitable growth. Though financial inclusion poses a policy challenge on a scale and with an urgency unique to developing countries, it is being viewed as a policy priority even in the developed countries. This book argues the case for provision of financial services for alleviation of poverty and for overall growth and effectiveness. It also warns of the economic consequences of excluding people at the bottom of the pyramid. Joshi explores several dimensions of exclusion. Poverty itself can threaten prosperity and lead to exclusion. The author draws attention to Amartya Sen’s critique of the standard economic approach which typically conflates well being with either money income or utility, and instead focuses on indicators of the freedom to live a valued life. Poverty is thus defined as deprivation in the space of capabilities rather than merely the lowness of income.