Tracking Financial Inclusion: Rural and Marginalised Perspectives in India

Abstract

The significance of an inclusive financial system cannot be overstated, particularly in fostering financial development. Recognizing the crucial role of finance in overall development, ensuring universal access becomes imperative. This paper undertakes an assessment of the temporal trajectory of financial inclusion in India, spanning from the 1970s to the present era. The objective is to elucidate the evolution of financial inclusion within the Indian economy, eschewing a comparative analysis with global counterparts. To gauge the extent of financial inclusiveness, metrics such as banking, deposit, and credit penetration serve as the overarching parameters. Through an endogenous determination process employing Principal Component Analysis, the weights assigned to these metrics are derived. The resultant index offers a straightforward and easily computable measure of financial inclusiveness.