India’s Digitalization–Inclusion Link: An Empirical Study

Abstract

This study examines the extent to which India’s technological innovation—captured through the Reserve Bank of India’s Digital Payments Index (DPI)—has influenced national financial inclusion outcomes, measured through the Financial Inclusion Index (FI-Index). Although digitalization and inclusion are frequently discussed in Indian policy discourse, empirical evidence linking their national-level indices remains scarce. Using secondary data from RBI’s annual DPI and FI-Index values for the period 2018–2023, the study quantifies the digitalization–inclusion relationship through trend analysis, Pearson correlation, and simple linear regression. While both indices show consistent growth over the period, 295.6%DPI expanded nearly 300% compared to FI-Index’s 30% growth. Statistical results reveal a weak, negative, and non-significant correlation between DPI and FI-Index (r = –0.316, p > 0.05). Regression analysis similarly states that  Digital Payments Index has no significant impact on Financial Inclusion Index.The findings suggest even though digital payments (as measured by the Reserve Bank of India’s Digital Payments Index-DPI) increased strongly, that increase did not correspond to a similar increase in broad financial inclusion (as measured by the Financial Inclusion Index-FI-Index) highlighting the need for complementary interventions in digital literacy, service accessibility, behavioural awareness, and infrastructure quality. The study contributes macro-level empirical evidence using nationally standardized indices and provides insights relevant for India’s forthcoming National Strategy for Financial Inclusion (NSFI) 2025–2030.