The Impact of Financial Deepening on Economic Growth in India

This study examines the impact of financial deepening on economic growth in India. Financial deepening is defined as a measure of financial inclusion which is measured by the number of accounts and the volume of bank deposits in an economy. Using data for the Indian economy over six years, the study finds that as the volume of bank deposits increases, the economic growth of India improves. Conversely, as the number of accounts increases, the impact on economic growth is negative. The study provides policy implications towards financial inclusion in a developing economy to examine how financial inclusion can drive economic growth and what factors are needed to strengthen this relationship.