Beyond the Interface: Internet Penetration, Human Agency, and Structural Determinants of the Gender Gap in Financial Inclusion across Indian States
Abstract
Despite the rapid strides in financial inclusion in India under Pradhan Mantri Jan Dhan Yojana (PMJDY), there is a continued gender gap in the utilization of the accounts, not just in ownership. This study attempts to answer the questions of what extent the internet penetration and per capita Gross State Domestic Product (GSDP) explains the state level adoption of female PMJDY and how digital literacy plays as a mediation between internet and financial autonomy of women. The research method adopted was mixed methods. The secondary data for women's PMJDY accounts, wireless internet subscribers, and per capita GSDP were obtained from government sources for Indian states and union territories and analyzed with the help of Ordinary Least Squares regression in Stata for the reference period (2022-2023). This was complemented by thematic analysis of informal discussions that were conducted with 15 women beneficiaries of digital literacy interventions. Internet penetration had a significant positive effect on the adoption of female PMJDY accounts (Beta = 70.09, p = .026), and per capita GSDP had a significant negative effect (Beta = −0.0005, p = .022); together the model explained 55.7% of the cross-state variation. Diagnostic tests indicated no heteroskedasticity or omitted-variable misspecification. Digital literacy emerged, qualitatively, as the mechanism through which internet access translated into independent financial behavior. Internet access and economic development are meaningful but incomplete structural predictors of women's financial inclusion; digital literacy is the missing link that converts access into agency. The results are for further investment in internet infrastructure along with vernacular-language digital-literacy platforms like DigiSakhi, to usher India's financial inclusion drive from merely having an account to true financial empowerment for women.
References
Ministry of Finance, Government of India. Pradhan Mantri Jan Dhan Yojana: Progress report December 2022. 2022, https://pmjdy.gov.in.
A. Sharma, S. Kukreja, N. Singh. Financial inclusion in India amid COVID-19 pandemic: Recent trends and determinants. Journal of the Knowledge Economy. 2024, https://doi.org/10.1007/s13132-024-01992-z.
S. Mondal. Financial inclusion and its determinants in India. Indian Economic Service Working Paper. 2022, https://www.ies.gov.in/pdfs/Sudipto-Mondal-Financial-Inclusion-and-its-determinants-in-India.pdf.
A. Demirgüç-Kunt, L. Klapper, D. Singer, S. Ansar. The global findex database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World Bank. 2022, https://doi.org/10.1596/978-1-4648-1897-4.
E. Duflo. Women empowerment and economic development. Journal of Economic Literature. Vol. 50, pg. 1051–1079, 2012, https://doi.org/10.1257/jel.50.4.1051.
N. Kabeer. Resources, agency, achievements: Reflections on the measurement of women’s empowerment. Development and Change. Vol. 30, pg. 435–464, 1999, https://doi.org/10.1111/1467-7660.00125.
E. Field, R. Pande, J. Papp, N. Rigol. On her own account: How strengthening women’s financial control impacts labor supply and gender norms. American Economic Review. Vol. 111, pg. 2342–2375, 2021, https://doi.org/10.1257/aer.20200705.
M. Duvendack, L. Sonne, S. Garikipati. Gender inclusivity of India’s digital financial revolution for attainment of SDGs. The European Journal of Development Research. Vol. 35, pg. 1369–1391, 2023, https://doi.org/10.1057/s41287-023-00585-x.
GSMA. The mobile gender gap report 2023. GSMA Connected Women. 2023, https://www.gsma.com/r/gender-gap/.
C. Gonzales, S. Jain-Chandra, K. Kochhar, M. Newiak, T. Zeinullayev. Catalyst for change: Empowering women and tackling income inequality. IMF Staff Discussion Note SDN/15/20. International Monetary Fund. 2015, https://www.imf.org/external/pubs/ft/sdn/2015/sdn1520.pdf.
World Bank. Empowering women through digital financial inclusion. World Bank Blog. 2023, https://blogs.worldbank.org/en/psd/empowering-women-through-digital-financial-inclusion.
M. Thakur, P. Arora. Digital financial literacy and its impact on financial decision-making of women: Evidence from India. Journal of Risk and Financial Management. Vol. 17, pg. 468, 2024, https://doi.org/10.3390/jrfm17100468.
D. Le Quoc. The relationship between digital financial inclusion, gender inequality, and economic growth. Journal of Business and Socio-economic Development. Vol. 4, pg. 370–388, 2024, https://doi.org/10.1108/JBSED-12-2023-0101.
S. Roy, B. Patro. Effect of women’s self-help group participation on their financial inclusion. Annals of Public and Cooperative Economics. 2025, https://doi.org/10.1111/apce.12496.
World Bank. Enabling digital financial inclusion for rural women: Emerging findings from India. World Bank Endpoverty Blog. 2024, https://blogs.worldbank.org/en/endpovertyinsouthasia/enabling-digital-financial-inclusion-rural-women-emerging-findings-india.
Reserve Bank of India. Handbook of statistics on Indian states 2022–23. RBI. 2023, https://www.rbi.org.in.
Telecom Regulatory Authority of India. Telecom subscription data report, December 2023. TRAI. 2023, https://www.trai.gov.in.
Lok Sabha. Unstarred question no. 2777: PMGDISHA female certified digital literacy candidates. Government of India. 2023, https://sansad.in.
Global Data Lab. Subnational human development index — India. Global Data Lab. 2023, https://globaldatalab.org.
Rajya Sabha. Unstarred question no. 997: PMJDY account statistics. Government of India. 2024, https://sansad.in.
Authors retain copyright of their published work and grant the International Journal of Social Science Research and Review (IJSSRR) the right of first publication.
Articles published in IJSSRR are distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided that the original work is properly cited.
Authors are permitted to share, archive, and distribute the published version of their work, provided that proper acknowledgement of the original publication in IJSSRR is given.
