Measuring Level of Financial Inclusion Across Selected North Eastern States and UT of J&K

Rayees Ahmad Hajam; Abdul Azeez N.P.; Mudasir Rajab

doi:10.17010/aijer/2026/v15i1/174819

Measuring Level of Financial Inclusion Across Selected North Eastern States and UT of J&K

Authors

Rayees Ahmad Hajam Research Scholar (Corresponding Author), Department of Economics, Aligarh Muslim University, Aligarh - 202 002, Uttar Pradesh https://orcid.org/0000-0001-7683-9679
Abdul Azeez N.P. Assistant Professor, Department of Economics, Aligarh Muslim University, Aligarh - 202 002, Uttar Pradesh https://orcid.org/0000-0002-8695-4950
Mudasir Rajab Assistant Professor, Department of Social Science, Akal University, Bathinda, Talwandi Sabo - 151 302, Punjab https://orcid.org/0000-0002-5334-1226

DOI:

https://doi.org/10.17010/aijer/2026/v15i1/174819

Keywords:

financial inclusion (FI), penetration index, availability index, usage index, index of financial inclusion (IFI), business correspondents (BCs).
JEL Classification Codes :G2, G20, P43, P45
Publication Chronology: Paper Submission Date : September 15, 2025 ; Paper sent back for Revision : January 22, 2026 ; Paper Acceptance Date : February 15, 2026

Abstract

Purpose : This study examined and compared the level of financial inclusion (FI) across the North-Eastern (NE) states of India and the Union Territory of Jammu and Kashmir (J&K).

Methodology : The present study employed Sarma’s (2008) Index of Financial Inclusion (IFI), which integrated three dimensions, such as penetration, availability, and usage, into a single composite measure. Both demographic and geographic aspects were incorporated in constructing the IFI for each selected state.

Findings : We found substantial regional disparities in FI. Among the NE states, Assam recorded the highest IFI value (0.60), while Arunachal Pradesh showed the lowest level of financial inclusion with an IFI of 0.043. Jammu and Kashmir attained the highest overall IFI value (0.76), reflecting relatively stronger FI compared to the NE region.

Practical Implications : The results highlighted the need for region-specific FI strategies. Policymakers and financial institutions should prioritize infrastructure development, digital financial services (FS), and targeted outreach programs in low-performing states. Strengthening banking penetration and usage in geographically remote and demographically dispersed regions can contribute to more balanced and inclusive economic development.

Originality : This study offered a comprehensive, comparative assessment of FI across strategically important and socio-economically diverse regions of India, providing evidence-based insights to support informed policy formulation.

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Published

2026-03-30

How to Cite

Hajam, R. A., N.P., A. A., & Rajab, M. (2026). Measuring Level of Financial Inclusion Across Selected North Eastern States and UT of J&K. Arthshastra Indian Journal of Economics & Research, 15(1), 38–53. https://doi.org/10.17010/aijer/2026/v15i1/174819

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Issue

Volume 15, Issue 1, January-March 2026

Section

Articles

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