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Measuring Financial Inclusion of Indian States: An Empirical Study


Sethy Susanta Kumar*, Goyari Phanindra



Indian Journal of Economics and Development
Year : 2018, Volume : 14, Issue : 1
First page : ( 111) Last page : ( 118) 
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/2322-0430.2018.00012.4

Measuring Financial Inclusion of Indian States: An Empirical Study

Sethy Susanta Kumar*, Goyari Phanindra

Doctoral Scholar and Professor, School of Economics, University of Hyderabad, Hyderabad-500046 (India)

*Corresponding author’s email:

JELCodes C12, G21, O43.

Online published on 23 March, 2018.


This paper examines the financial inclusion of Indian states by applying the financial inclusion index (FII) using the secondary data. The present study found that no state in India belongs to high financial inclusion (0.5#1) group during the study period. FII#Kerala (0.4116) secured the first rank in FII followed by Goa (0.4016), Delhi (0.356), Punjab (0.33), Tamil Nadu (0.3279) and West Bengal (0.31). These states were categorized under the medium financial inclusion (0.3# 0.5) and rest of the states had low FII#financial inclusion (0#0.3). Madhya Pradesh (0.1066) secured the last rank in comparison to other states of India. Regression FII #results show that per capita income of households, literacy rate and the number of SHGs affect the FII positively and significantly. The study suggested that policymakers should increase banking penetration and availability of banking services to push the usage of the banking system. Moreover, there is need of a comprehensive financial inclusion plan for India as a whole along with regionspecific inclusion plans.

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