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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