Foreword

Financial inclusion is the key to bridging the social divide and achieving a well distributed, robust and sustainable economic growth.

CRISIL Inclusix, India’s first financial inclusion index, was launched in 2013 with the objective of creating a dependable yardstick that would become a policy input to further the cause of inclusion.

I am happy to share that this edition of CRISIL Inclusix is more comprehensive than before, and provides insights beyond banking. This time, life insurance data has been added to the index calculus to make it a more inclusive barometer.

CRISIL Inclusix, thus, weighs three service providers (banks, insurers and microfinance institutions) on four dimensions (branch, credit, deposit and insurance) now.

The analysis shows that the Jan-Dhan, Aadhaar and mobile trinity is slowly but surely making a seminal difference to financial inclusion. Since launch in August 2014, more than 31 crore Jan-Dhan accounts have been opened.

Given this one-time jump, it was important that the index be rebased. Had this not been done, and should the insurance dimension not have been taken, the all-India CRISIL Inclusix score would have shot up to 62.2 instead of 58. The move to 58.0 from 56.2 in 2015 and 50.1 in 2013 is significant progress itself.

Coming to insurance, the total number of life cover policies issued in India is 34 crore, which is barely a fifth of the 165 crore deposit accounts. And over 90% of these are savings-linked insurance products. Clearly, there exists big opportunity for more inclusion.

The district-level data for the National Pension System (NPS) was also obtained. However, given that this offering is relatively new compared with deposits or life insurance, and that its subscribers are very few compared with other pension plans, we are presenting NPS coverage separately here.

One of the key takeaways from this exercise is the conspicuous lack of a central repository of pension data in India. Setting this up will contribute to effective pension planning and policy-making, especially as India’s population ages over the coming decades.