We live in extremely uncertain times, as epidemiologists and scientists grapple to understand the virus that has caught the world in its grip. The global economy has been shattered with supply chains and movement of people paralysed like never before. In such times, conventional measures of growth break down. The IMF has drastically revised India’s growth within two months - from its April estimate of 1.9% to a contraction of 4.5% this year. There are a few green shoots as the lockdown was eased in June – the Markit Purchasing Managers Index moved up for both manufacturing and services, though stayed in the contraction zone under 50; E-way bill generation is moving towards the March levels, as are CMIE tracked unemployment rates. The challenge that we face today is of uncertain demand – only 21% of the Rs. 3 lakh crore allocated under the Emergency Credit Guarantee Line Scheme has been sanctioned so far, most MSMEs are reportedly not in favour of more debt when the future demand is uncertain.
It is now that the most vulnerable segments have come at the forefront of public attention –– the rural poor, migrant workers, micro businesses – all those who are still not completely covered by the financial inclusion mission. The Indian governance systems have been going through severe testing these past three months. While the Direct Benefits Transfers processes put in place over the past few years have worked well, there has been significant stress on business correspondents – the last mile agents for banking.
We, at the Indicus Centre for Financial Inclusion, are restarting our monthly newsletter, to highlight the most important news and analysis and keep regulation and policy focused on meaningful inclusion. Working in this field since 2011, our aim has been to spur discussion and debate on different models for achieving universal financial inclusion. While India has achieved so much over the past decade, the current crisis has shown the warts, the many gaps that remain to be filled. We look forward to your feedback as we begin our dialogue with all stakeholders for a common roadmap.