ABSTRACT
The gravity of an inclusive economic system has been extensively recognized in recent years and financial inclusion is seen to be a priority for policy makers in various countries. Financial inclusion is the ease of access, availability and usage of the formal financial system by all the people of the economy. The growing literature on financial inclusion has provided plenty of evidences on the merits of an inclusive financial system. This paper is an attempt to propose an index of financial inclusion for India for a period of 13 years from 2005 to 2017. A comprehensive measure of financial inclusion is important to keep a track of the progress of the initiatives taken by policymakers to boost financial inclusion. This paper aims to analyze various dimensions of financial inclusion and enumerate an index which can extensively apprehend the impact of multi dimensional variables. Earlier studies have attempted to measure financial inclusion taking banking indicators alone. This paper incorporates the insurance sector indicators as well. So the paper induces an index that allows for an overview of India in terms of financial inclusion. The results show a general increase in the level of financial inclusion over the span of 13 years.
