One of the important flagship initiatives of government of India is financial inclusion which ensures wider access to financial services. This scheme is vital for sustainable and equitable growth and as per existing literature there are significant regional variations in the country. Therefore, this study evaluates the disparities in the levels of financial inclusion between the year 2019 and 2024 across states and union territories in India. The financial inclusion index is based on three key indicators namely account access, service utilization, and financial literacy. The study identified banking penetration and service consumption as the two primary factors impacting financial inclusion levels. Results show that there is significant progress at national level, yet the results highlight persistent and substantial disparities across states. States with high levels of urbanization tend to benefit from superior infrastructure and high financial literacy rates. Rural and remote regions are lacking due to logistic challenges, lower rates of digital adoption and weaker credit market development. The research highlights the need for continued, targeted efforts to ensure equitable access to financial services for all urban as well as rural population. These results will help the policy makers in enhancing financial inclusion across urban and rural areas, thereby reducing economic divide.
