Determinants of Inclusive Growth through the Financial Sector in Haryana: A Structural Model Approach

Abstract

Inclusive growth has been recognized as one of the main objectives of development, especially in the areas where economic growth has not led to equal distribution of opportunities. By adopting a structural model approach, this research has identified the factors that contribute to inclusive growth via the financial sector in Haryana. The data used was gathered from 467 individuals living in both urban and rural areas, and the study looked into the impact of demographic factors, structural obstacles, and institutional support on the outcomes of inclusive growth. To this end, SEM has been adopted to evaluate direct and interrelated effects among the constructs. Results show that the demographic characteristics are the primary determinants of the financial inclusion outcomes, meanwhile, the problems related to the accessibility, quality of service, communication, and complaints handling hinder the process of growth being inclusive. Institutional drivers consisting of government policies, digital finance, financial literacy, microcredit, and the role of the private sector have shown a very strong positive impact on the financial sector's role in inclusive growth. The study argues for a need of comprehensive and tailored financial inclusion strategies that can deal with demographic differences and institutional weaknesses at the same time. The research findings have implications for the policymaking related to financial sector development, particularly in terms of designing measures that will enable the sector to play a more inclusive role in Haryana....