Financial Inclusion in Rural India: A District Level Study

In India, financial inclusion has been recognized as an important pillar of inclusive growth. It is the prerequisite for ensuring sustainable development for the large proportion of the population especially those living in rural areas. This paper measures financial inclusion level in rural areas of India at the district level by constructing a comprehensive Financial Inclusion Index (FII), incorporating 15 indicators representing three dimensions of inclusive finance covering branches, deposits and credit. The study covers 623 districts of the country for the year 2013. The results portray presence of glaring disparities amongst rural areas of different districts in terms of selected indicators. Further, the maximum disparities have been found in the indicators pertaining to usage of financial services. The overall financial inclusion level has also been found to be low, as only 196 districts out of 623 have index value above the average value of 50