The extent of financial inclusion through MGNREGS: a district level analysis in West Bengal, India

Purpose - Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) launched in the year 2006, with the pursuit of the objective of removing poverty and unemployment and thus address the issue of financial inclusion. The performance of the programme across the states in India has not been uniform. The purpose of this study is to focus on the financial inclusiveness features associated with MGNREGS program across the selected districts in West Bengal in the years of recent past. Design/methodology/approach - In this study, financial inclusion index has been developed by consideration of four indicators with the help of principal component method. Fixed effect regression model has been applied to explain the impact of relevant determinants on financial inclusion index. Findings - It is observed that out of 19 districts, seven districts registered an increase in the value of the financial inclusion index in the year 2019 compared to that in the year 2013. The empirical analysis for identifying the determinants of overall inclusion reveals that factors like households having active job card, utilization of fund, amount of labour cost and number of works have significant influence on financial inclusion. Originality/value - The study widely discussed how the scheme was helping in promoting financial inclusion by providing wage payment through banks and post offices accounts. The author has also tried to highlight some of the difficulties in accelerating the speed of financial inclusion when banks and post offices are used as a means for wage payment and finally provide remedial measures that could be taken to tackle these problems.