Which one of the following correctly represents the three key sub-indices of the Financial Inclusion Index (FI-Index) of the Reserve Bank of India (RBI) ?
- A.Credit access, Insurance depth, and Pension coverage
- B.Banking access, GDP contribution, and Financial literacy
- C.Access, Usage, and Quality
- D.Access, Affordability, and Transparency
Correct answer
Explanation
The correct answer is C, Access, Usage, and Quality. The RBI's FI-Index is built from these three sub-indices.
The RBI introduced the Financial Inclusion Index in August 2021 to measure how far financial inclusion has spread across the country. It covers banking, investments, insurance, postal services and pensions, and it is a single number between 0 and 100, where 0 means complete exclusion and 100 means full inclusion. Its weights are Access 35 per cent, Usage 45 per cent and Quality 20 per cent. The Quality part looks at financial literacy, consumer protection and inequalities in services. The index is published every July for the year ending March, and it was built without any base year.
A is wrong because credit, insurance and pensions are sectors the index covers, not its sub-indices. B is wrong because GDP contribution is not part of the index, and literacy sits inside Quality. D is wrong because affordability and transparency are not the named sub-indices.
Exam tip: RBI FI-Index, 2021: Access 35%, Usage 45%, Quality 20%; scale 0 to 100.
Practice Questions
View allThe Fourteenth Finance Commission assigned different weights to the following parameters for distribution of tax proceeds to the States :
1. Income distance
2. Population
3. Demographic changes
4. Area
Arrange the aforesaid parameters in descending order in terms of their weights.
- A.1-2-3-4
- B.1-2-4-3
- C.1-3-2-4
- D.4-3-2-1
Show answer
Income distance had the highest weight, followed by population, area and demographic change. The Fourteenth Finance Commission, chaired by Y.V.
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- B.The market price must be equal to marginal cost.
- C.The market price must be equal to average cost in the long run.
- D.The marginal cost decreases at the equilibrium output.
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Show answer
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