Financial inclusion in India: Progress, challenges, and future prospects

Abstract

Financial inclusion has emerged as a critical policy objective in India's developmental journey, aiming to provide affordable and timely access to financial services for all segments of society. This article examines the progress and prospects of financial inclusion in India, drawing upon secondary data from the Reserve Bank of India, government reports, and national surveys. The analysis reveals significant strides in financial inclusion, with the RBI's Financial Inclusion Index rising from 43.4 in 2017 to 67.0 in 2025, driven by improvements in access, usage, and quality dimensions. The Pradhan Mantri Jan Dhan Yojana (PMJDY) has successfully brought over 56 crore beneficiaries into the formal banking system, while insurance schemes (PMJJBY, PMSBY) and the Atal Pension Yojana (APY) have expanded social security coverage. However, challenges persist in the form of dormant accounts, regional disparities, and limited outreach to marginalised groups. The article concludes with policy recommendations for deepening financial inclusion through enhanced financial literacy, digital infrastructure, and targeted interventions for underserved populations.