New Delhi: The government has made conscious attempts to nudge the process of financial inclusion in the last few years, but it is still far from achieving its target, finance minister Arun Jaitley said.
“If we don’t catch up in accordance with the requirements of the society, a day won’t be very far off when we are faced with serious challenges of a large section of senior citizens who are completely devoid of any form of dependency itself," Jaitley added at the release of the latest edition of Crisil inclusix report.
Crisil inclusix is an index launched in 2013 to measure progress in financial inclusion across the country on a scale of 0 to 100. The index showed a score of 58 in fiscal 2016 as compared to 50.1 in fiscal 2013. The increase was driven by strong growth in deposits and credit accounts, the report said.
The index weighs three service providers (banks, insurers and micro-finance institutions) on four dimensions (branch, credit, deposit and insurance). The inclusion of life insurance in the index, which was included in the edition of the report launched on Wednesday, i.e. for fiscal 2016, has made it a “more comprehensive barometer", the report said.
The report says the Jan Dhan-Aadhaar-Mobile trinity is slowly but surely making a seminal difference to financial inclusion. More than 310 million new deposit accounts have been opened since the launch of Pradhan Mantri Jan Dhan Yojana (PMJDY) in August 2014.
However, the report also showed that the total number of life cover policies issued in India is 340 million, barely a fifth of the 1,650 million deposit accounts. This indicates that there exists a big opportunity for more inclusion.
“Policy measures such as the PMJDY, and steadfast focus on the unbanked regions have driven India’s financial inclusion agenda over the past three years. As many as 336 out of 666 districts have scored ‘above-average’ on the Crisil inclusix index this time," said Ashu Suyash, managing director and chief executive officer of Crisil Ltd.
Among regions, South India continues to lead in financial inclusion by a significant margin. Among states, Kerala was well ahead with a score of 90.9. But others are catching up, the report said. According to the report, coverage under the National Pension Scheme (NPS) rose three-fold to 18.7 in fiscal 2016 from 6.3 in fiscal 2013. The factors leading to the growth were continuous increase in the number of government employees covered under NPS and strong emphasis on including the economically weaker sections through the Atal Pension Yojana, which replaces NPS Lite in June 2015.
A total of 10 million new NPS accounts were opened during this period, it showed.
“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," Suyash said.