India has made great strides in financial inclusion (FI), with the percentage of females having a bank account catching up with that of males, going by data presented in the Economic Survey (ES) 2023-24.

Referring to Work Bank’s latest data Global FI Database, the Survey noted that 78 per cent of both genders (above 15 years) had a bank account in 2021 against 44 per cent for males and 26 per cent for females in 2011.

“Financial inclusion is not just a goal but also a means to an end as an enabler for sustainable economic growth, reduction of inequality and elimination of poverty.

“....The government has prioritised delivering financial services to the last mile. Given the low levels of financial inclusion and formal identification in 2008, the magnitude of the challenges facing India a little over a decade ago was immense,” the Survey said.

Financial inclusion

According to the World Bank’s Global FI Database, India has made remarkable progress in its financial inclusion goals over the past ten years.

The number of adults with an account in a formal financial institution increased from 35 per cent in 2011 to 77 per cent in 2021, per the Survey, adding the gender divide in terms of financial inclusion has also narrowed.

Further, there has been an increase in the percentage of adults borrowing from formal sources from 8 per cent in 2011 to 12 per cent in 2021.

There has been a decline in the access gap vis-a-vis financial services between the rich and the poor, the survey said.

digital inclusion

The report emphasised that financial inclusion is within reach, digital financial inclusion is the next goal.

The report noted that based on the bank account data and the relationship with GDP per capita, one rough estimate is that it would have taken 47 years to achieve 80 per cent of adults with a bank account had India solely relied on traditional growth processes.

“More recently, there has been a shift in focus of the financial inclusion strategy in the country, from ‘every household’ to ‘every adult,’ with added emphasis on the usage of accounts by enhancing direct benefit transfer (DBT) flows through these accounts, promoting digital payments using RuPay cards, UPI etc,” the Survey said.

The Survey referred to RBI launching UPI123Pay in March 2022 as an option to make UPI payments for feature phones, and the National Payments Corporation of India (NPCI) introducing UPI Lite, an on-device wallet service provided by select banks that allows low-value transactions up to ₹200 through the BHIM app.

These innovations are steps towards accelerating the digital adoption process in India by creating a more prosperous and inclusive ecosystem that can accommodate larger sections of the population, it added.

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