A Study on impact of digital India financial inclusion programmes on economic wellbeing in villages

Abstract

ndia is predominantly a rural country with almost 66% of workforce in rural areas andeconomical share of 46.9% of the total economy. Over the last three decades there has been sharp decline in rural economy. Among many efforts to boost rural economy, financial inclusion is an important step pushed by Indian government as the rural areas lack knowledge and access to various financial instruments. From 2014, government has started launching various financial inclusion programmes to bring majority of Indian rural population into formal financial sector. From year 2014 to 2017 more than 330 million people were brought into formal financial sector with Pradhan Mantri Jan-Dhan Yojana (PMJY) scheme. Financial inclusion push is accelerated through various schemes like Digital India, Direct benefit transfer, Rupay, UPI payments etc. Jan Dhan–Aadhaar–Mobile (JAM) trinity has created a positive impact on the banking sector in the country. But the influence of these schemes on the economic well being of rural citizens is not a widely explored area. This work studies the impact of various financial inclusion schemes on economic wellbeing of rural citizens. The study proposes a new economic satisfaction scale to measure the effectiveness of financial inclusion on the economic well being in rural villages. This scale is validated and reliability analysis of it is conducted through statistical tests. The study is conducted using a structured questionnaire response from 10 rural areas of Karnataka. Through the questionnaire responses, correlation between the various financial inclusion programmes and its economic impact on rural livelihood are analysed.