Why in News?
- The Union Minister of Finance and Corporate Affairs has launched the Financial Inclusion Index.
Financial Inclusion Index:
- Department of Financial Services (DFS), Ministry of Finance will release an Annual Financial Inclusion Index (FII).
- The index will be a measure of access and usage of a basket of formal financial products and services that includes savings, remittances, credit, insurance and pension products.
- The index will have three measurement dimensions:
- Access to financial services
- Usage of financial services
- The single composite index gives a snap shot of level of financial inclusion that would guide Macro Policy perspective.
Utility of the Index:
- The various components of the index will help to measure financial services for use of internal policy making.
- Financial Inclusion Index can be used directly as a composite measure in development indicators.
- It enables fulfillment of G20 Financial Inclusion Indicators requirements.
- It will also facilitate researchers to study the impact of financial inclusion and other macro-economic variables.