Gujarat financial inclusion index slips, most districts perform worse than national average

By Rajiv Shah

Despite wide talk of Gujarat being No 1 in things financial, top rating agency Crisil has found that the state is failing to improve upon its financial inclusion index compared to most of India. The top consulting firm's new report has revealed that the financial inclusion index, called Inclusix – a concept it worked out in alliance with the Ministry of Finance, Government of India, to find out how deep is financial penetration among larger sections of population – has revealed, Gujarat has failed to improve its performance over the last four years in providing the three critical parameters of banking services, viz. branch penetration, deposit penetration, and credit penetration.

Titled “Crisil Inclusix: An Index to Measure India’s Progress on Financial Inclusion”, this is the second report in a year brought out by India’s authoritative consulting firm, which is supported by the well-known US rating agency, Standard & Poor.
Dated January 2014, the report – which bases the financial inclusion rankings of all the 35 Indian states and 638 districts on the basis of the data provided by the Reserve Bank of India (RBI) – has found that Gujarat has not only slipped its ranking from the 17th position in 2009 to 18th in 2011 and further to 19th in 2012. The state’s Inclusix score in 2012 was found to be 40.6 on a scale of 100 — which is 2.2 points below the national average of 42.8. India’s financial index registered an improvement by 2.7 in 2012, compared to 2011, when it was 40.1. As against this, Gujarat’s financial inclusion index improved by just 2.0.

Financial inclusion index on a scale of 100: Indian states

Worse, the data suggest, of the 26 Gujarat districts analysed by the top consulting firm, only 10 districts were able to perform better than the national average (42.8). These districts are Porbandar (56.8), Vadodara, (54.1), Jamnagar (51.6), Navsari (50.4), Ahmedabad (50.3), Kutch (45.8), Anand (46.8), Rajkot (46.4), Bharuch (45.4), and Amreli (44.1). Even the state capital, Gandhinagar, being projected by the powers that be as the “role model” township for other states to follow in financial development, could score below the national average with 42.7.

While none of Gujarat districts could make it to the top 50, backward districts of the state continued to show poor performance in financial inclusion, too, in almost the same way as other social sectors. Thus, the predominantly tribal district of Dahod scored 22.7 on a scale of 100, the worst in Gujarat, ranking No 571 among 638 Indian districts. The situation was found to be not very different for the border district of Banaskantha, scoring 23.4, and ranking No 560; Panchmahals, scoring 25.3, and ranking 532; Tapi, scoring 26.4, and ranking No 515, and so on. Each of these districts has a sizable number of tribal population.
What should be particularly disconcerting for the policy makers, who are seeking to project Gujarat as the future “financial capital” of India by introducing the Gujarat International Finance Tec-city (GIFT) next to Gandhinagar, is that several major districts, known for industrial development, performed poor compared to large parts of India. Surat, Gujarat’s second biggest city which has become an industrial and commercial hub, for instance, scored 35.0, ranking No 340, and Bhavnagar scored 32.1, ranking No 409.
Major states which performed better than Gujarat are – Kerala, with a score of 80.7, double that of Gujarat, Delhi (78.2), Andhra Pradesh (64.8), Tamil Nadu (64.8), Karnataka (61.4), Himachal Pradesh (58.4), Punjab (56.8), Uttarakhand (52.4), Haryana (49.3), Orissa (43.3) and Maharashtra (40.7). Interestingly, the study shows that out of 35 Indian states (both major and minor), as many as 22 of them showed a better improvement in their score in 2012 over 2011, as compared to that of Gujarat.
Among the major Indian states, the best improvement was registered by Delhi (14.0). This was followed by Kerala 4.3, Tamil Nadu 4.2, Karnataka 4.2, Andhra Pradesh 3.5, Karnataka 3.7, Andhra Pradesh 3.5, Maharashtra 3.2, Madhya Pradesh 3.2, Jammu & Kashmir 3.1, Odisha 2.8, West Bengal 2.5, Assam 2.2 and Rajasthan 2.1. Gujarat’s improvement was 2.0 on a scale of 100, which suggests that in financial inclusion the state machinery failed to mobilise banks to remotest corners, despite loud talk about mobilising finances for micro credit.

Financial inclusion index on a scale of 100: Gujarat districts

Crisil says, India’s score of 42.8 on a scale of 100 reflects “under-penetration of formal banking in the country.” It underlines, “Just one in two Indians have a bank savings account, and one in seven access to bank credit.” It points towards “wide regional disparities”, with south Indian states remaining “leader in financial inclusion” in “all three dimensions of financial inclusion”. These states, in fact, “strengthened” their “leadership in 2012.” What it said of India was found to be equally true for Gujarat.

Comments

Mergers and privatisation: The Finance Minister’s misguided banking agenda

By Thomas Franco The Finance Minister has once again revived talk of merging two or three large public sector banks to make them globally competitive. Reports also suggest that the government is considering appointing Managing Directors in public sector banks from the private sector. Both moves would strike at the heart of India’s public banking system . Privatisation undermines the constitutional vision of social and economic justice, and such steps could lead to irreversible damage.

Political misfires in Bihar: Reasons behind the Opposition's self-inflicted defeat

By Vidya Bhushan Rawat* The Bihar Vidhansabha Election 2025 verdict is out. I maintained deliberate silence about the growing tribe of “social media” experts and their opinions. Lately, these do not fascinate me. Anyone forming an opinion solely on the basis of these “experts” lives in a fool’s paradise. I do not watch them, nor do I follow them on Twitter. I stayed away partly because I was not certain of a MahaGathbandhan victory, even though I wanted it. But my personal preference is not the issue here. The parties disappointed.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Rajiv Shah Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Celebrating 125 yr old legacy of healthcare work of missionaries

Vilas Shende, director, Mure Memorial Hospital By Moin Qazi* Central India has been one of the most fertile belts for several unique experiments undertaken by missionaries in the field of education and healthcare. The result is a network of several well-known schools, colleges and hospitals that have woven themselves into the social landscape of the region. They have also become a byword for quality and affordable services delivered to all sections of the society. These institutions are characterised by committed and compassionate staff driven by the selfless pursuit of improving the well-being of society. This is the reason why the region has nursed and nurtured so many eminent people who occupy high positions in varied fields across the country as well as beyond. One of the fruits of this legacy is a more than century old iconic hospital that nestles in the heart of Nagpur city. Named as Mure Memorial Hospital after a British warrior who lost his life in a war while defending his cou...

New RTI draft rules inspired by citizen-unfriendly, overtly bureaucratic approach

By Venkatesh Nayak* The Department of Personnel and Training , Government of India has invited comments on a new set of Draft Rules (available in English only) to implement The Right to Information Act, 2005 . The RTI Rules were last amended in 2012 after a long period of consultation with various stakeholders. The Government’s move to put the draft RTI Rules out for people’s comments and suggestions for change is a welcome continuation of the tradition of public consultation. Positive aspects of the Draft RTI Rules While 60-65% of the Draft RTI Rules repeat the content of the 2012 RTI Rules, some new aspects deserve appreciation as they clarify the manner of implementation of key provisions of the RTI Act. These are: Provisions for dealing with non-compliance of the orders and directives of the Central Information Commission (CIC) by public authorities- this was missing in the 2012 RTI Rules. Non-compliance is increasingly becoming a major problem- two of my non-compliance cases are...

N-power plant at Mithi Virdi: CRZ nod is arbitrary, without jurisdiction

By Krishnakant* A case-appeal has been filed against the order of the Ministry of Environment, Forest and Climate Change (MoEF&CC) and others granting CRZ clearance for establishment of intake and outfall facility for proposed 6000 MWe Nuclear Power Plant at Mithi Virdi, District Bhavnagar, Gujarat by Nuclear Power Corporation of India Limited (NPCIL) vide order in F 11-23 /2014-IA- III dated March 3, 2015. The case-appeal in the National Green Tribunal at Western Bench at Pune is filed by Shaktisinh Gohil, Sarpanch of Jasapara; Hajabhai Dihora of Mithi Virdi; Jagrutiben Gohil of Jasapara; Krishnakant and Rohit Prajapati activist of the Paryavaran Suraksha Samiti. The National Green Tribunal (NGT) has issued a notice to the MoEF&CC, Gujarat Pollution Control Board, Gujarat Coastal Zone Management Authority, Atomic Energy Regulatory Board and Nuclear Power Corporation of India Limited (NPCIL) and case is kept for hearing on August 20, 2015. Appeal No. 23 of 2015 (WZ) is filed, a...

A comrade in culture and controversy: Yao Wenyuan’s revolutionary legacy

By Harsh Thakor* This year marks two important anniversaries in Chinese revolutionary history—the 20th death anniversary of Yao Wenyuan, and the 50th anniversary of his seminal essay "On the Social Basis of the Lin Biao Anti-Party Clique". These milestones invite reflection on the man whose pen ignited the first sparks of the Great Proletarian Cultural Revolution and whose sharp ideological interventions left an indelible imprint on the political and cultural landscape of socialist China.

Whither GIFT City push? Housing supply soars in Mumbai, Hyderabad, Pune, not Ahmedabad

By Rajiv Shah A new report by a firm describing itself as a "digital real estate transaction and advisory platform," Proptiger , states that the Mumbai Metropolitan Region (MMR) has been the largest contributor to housing units among India's top eight cities currently experiencing a real estate boom. Accounting for 26.9% of all new launches, it is followed by Pune with 18.7% and Hyderabad with 13.6%. These three cities collectively represented 59.2% of the new inventory introduced during the third quarter (July to September 2025), which is the focus of the report’s analysis.

Only one Indian national park rated ‘good’ by IUCN: Concerns over ecological governance

By A Representative Environmental policy expert Shankar Sharma has written to the Ministry of Environment, Forest and Climate Change (MoEF&CC) and its affiliated institutions, expressing grave concern over India’s deteriorating ecological health. Citing the International Union for Conservation of Nature (IUCN)’s latest global review, which found that only Khangchendzonga National Park received a “Good” rating among 107 national parks, Sharma warned that the findings reveal a “serious concern for the overall health of the country’s flora, fauna, and environment.”

Search This Blog