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Rise seen in financial inclusion index, jobs in the country, notes RBI

Rise seen in financial inclusion index, jobs in the country, notes RBI
The Reserve Bank's FI, or financial inclusion index, which captures the extent of financial inclusion across the country, rose to 64.2 in March 2024, marking growth across all parameters. The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.

"The value of the index for March 2024 stands at 64.2 vis-a-vis 60.1 in March 2023, with growth witnessed across all sub-indices," the Reserve Bank of India (RBI) said in a statement today. During FY23, the FI Index stood at 60.1.

Improvement in FI-Index is mainly contributed by usage dimension, which further reflects deepening of financial inclusion, it added. The FI-Index comprises three broad parameters -access, which has a 35% weightage, usage, which has a 45% weight and quality, which has a 20% weight. Each of these parameters further consist of various dimensions, which are computed based on a total of 97 indicators.

Breaking these parameters ahead, access is made up of 26 indicators, which capture the number of banking outlets NBFCs, and post offices, total number of savings accounts (including small savings), electronic payment infrastructure and more.

Usage comprises 52 indicators, which aims to capture the demand side, and is essentially a barometer for understanding how actively financial infrastructure is being utilized in our country by way of savings, investment, insurance, availing of credit and remittance facilities, etc.

And lastly, quality, which consists of 19 indicators, takes into account the efficacy of existing grievance redressal mechanisms and awareness efforts undertaken by stakeholders and more.

In August 2021, the central bank said FI-Index has been conceptualized as a comprehensive index, incorporating details of banking, investments, insurance, postal, as well as the pension sector, in consultation with government and respective sectoral regulators.

The index is responsive to ease of access, availability and usage of services, and quality of services. According to RBI, a unique feature of the index is the quality parameter which captures the quality aspect of financial inclusion as reflected by financial literacy, consumer protection and inequalities and deficiencies in services.

India added 4.7 crore jobs in 2023-24, says RBI

In another significant data release during the day, the apex bank of the country noted that India added nearly 4.7 crore jobs during 2023-24, taking the total number of employed people to 64.33 crore, which are spread over 27 sectors covering the entire economy. The number of employed people was 59.67 crore at the end of March 2023, as per the RBI's update on 'Measuring Productivity at the Industry Level-The India KLEMS [Capital (K), Labour (L), Energy (E), Material (M) and Services (S)] Database'.

The bank said the annual growth in employment during 2023-24 was 6% compared to 3.2% in the year-ago period. In the last five years, the India KLEMS database revealed that total employment increased from 53.44 crore in 2019-20 to 64.33 crore during the previous fiscal. The data for financial 2022-23 is a provisional estimate of productivity for the total economy.

The 'agriculture, hunting, forestry and fishing' employed 25.3 crore individuals, up from 24.82 crore in 2021-22, the fiscal 2022-23 data suggested.

Construction, trade, and transport and storage were among the leading employment provider segments in 2022-23. Notably, for the purpose of this database, 27 industries are clubbed together to form 6 major sectors, namely

  • Agriculture, Hunting, Forestry and Fishing
  • Mining and Quarrying
  • Manufacturing
  • Electricity, Gas and Water supply
  • Construction
  • Services