Financial Inclusion is happening, gradually...

Financial Inclusion has been one of the key thrust areas for the current government. This manifested itself with the launch of the Jan Dhan scheme immediately after they came to power in 2014. That said, in absolute terms, the number of savings accounts have grown at just 9% Cagr between 2015-2020, sharply lower than the 16% growth in the preceding 5-year period.

However, the regional dispersion of growth in Savings accounts has been positive. In general, the states with lower penetration of Savings accounts in 2015 have seen faster growth between 2015 to 2020. Bihar for instance has seen more than doubling of Savings accounts in the last 5 years. As against this, Telangana has seen just 25% growth in Savings accounts during this period. Jharkhand has seen nearly 70% growth in Savings accounts in the past 5 years while Delhi has seen just 30% growth.

While this has narrowed the regional disparity in access to the Banking system for savings, the disparity in absolute terms remains high. Some of the Northeastern States and Bihar have just 70 savings accounts per 100 people as of March-2020 while the Southern States have more than 2x the number of savings accounts relative to population. Goa remains an outlier with 258 savings accounts per 100 people in the state, 2x All India average.

The regional inequalities are narrowing. Financial inclusion is happening. But at a modest pace. At least when it comes to access to Banking system and Savings accounts, basis this data.