www.eprawisdom.com 182 Volume - 5, Issue- 8, August 2017 Volume - 5, Issue- 8, August 2017 ISI Impact Factor (2013): 1.259(Dubai) SJIF Impact Factor(2016) : 6.484 www.eprawisdom.com EPRA International Journal of Economic and Business Review Research Paper IC Value : 56.46 e-ISSN : 2347 - 9671| p- ISSN : 2349 - 0187 A STUDY ON THE BENEFITS OF FINANCIAL INCLUSION AND CASHLESS ECONOMY FOR INDIA Gowtham Ramkumar 1 1 PG Student, Department of Commerce, Madras Christian College, Tambaram, Chennai,Tamil Nadu, India ABSTRACT T he economic environment of India has witnessed a significant changes in the past three and a half years. Many policy reforms are introduced by the government to accelerate the growth rate of the economy. Economic growth of the country depends on various factors and it can be measured in several aspects. Macroeconomic variables like GDP, standard of living, per capita income, performance of SSI sector etc reflects the economic growth. However there are barriers to achieve a good economic growth like parallel economy, money laundering etc. These activities bring down the growth rate of any country and series of steps are taken by the government to bring down those illegal activities. Any country can attain development only when it has economic growth and the growth should be an inclusive growth. This research paper brings out the various benefits of economic reforms named financial inclusion and cashless economy introduced by government of India and discusses how these benefits will contribute to long term economic growth and development. KEYWORDS : Economic growth, parallel economy, financial inclusion and cashless economy INTRODUCTION The objective of sustainable development can be achieved only when people from all section of the society take part in economic transactions. Lack of awareness and financial illiteracy as a barrier to the economic growth as majority of the population had problems in accessing to the formal credit. To overcome this, financial inclusion came into picture. Similarly economic growth is also hindered by problems like parallel economy transactions and allied illegal activities. To overcome this barrier, government wants people to move towards cashless transactions and transform cash based economy to cashless economy. Some pioneering definitions of financial inclusion and cashless economy are given below According to the Planning Commission (2009), Financial inclusion refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity products. The household access to financial services includes access to contingency planning, credit and wealth creation. Access to contingency planning would help for future savings such as retirement savings, buffer savings and insurable contingencies and access to credit includes emergency loans, housing loans and consumption loans. On the other hand, access to wealth creation includes savings and investment based on household’s level of financial literacy and risk perception. GOI (2008) defines Financial inclusion as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost. The meaning of financial inclusion is delivery of financial services to the low income groups especially the excluded sections of the population with the provision of equal opportunities. The main target is