Received: 25.04.2021; Revised: 28.06.2021, Accepted: 05.07.2021, Published Online: 31.07.2021

Dr. Ruchi Sharma

Project Director, ICSSR IMPRESS, P.G. Department of Economics, Goswami Ganesh Dutta Sanatan Dharam College, Chandigarh, India,  Email id:



Access to financial services is a sine qua non for economic development. Although an enormous development has been made in ensuring access to financial services in India; vast proportions of the population are still excluded from formal financial institutions.An inclusive financial system is the need of the hour.A more focused and structured approach towards financial inclusion has been followed in India since the year 2005. Acomposite measure of financial inclusion which could facilitate comparisons across time and geography and ensure consistency and accuracy in the measurement of financial inclusion parameters has been proposed in the paper. The financial inclusion index based on penetration, availability and usage dimensions of financial inclusionhas been calculated across all the states of Indiafor the years 2005,2010,2015, and 2019.The index takes values between 0 and 1. 0 denotes complete financial exclusion and 1 indicates complete financial inclusion in an economy. IFI in India improved at the aggregate level from 2005 to 2019.But a concerning fact is that only a few developed states are having a high or medium level of financial inclusion. The majority of states are having a low level of financial inclusion.For a mission to sustain the economic development of the country,the neglected sections of the society must be brought into the banking fold which subsequently can act as a base for providing other services. The movement of financial inclusion can be the real hope for inclusive growth.

Keywords: Commercial Banking Development, Penetration, Availability,Usage, Financial Inclusion Index