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
  • Quality
• 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.