Much more has to be done to bridge the gap to empower every citizen
By R. Suryamurthy
India has long been celebrated as a global trailblazer in financial inclusion. From biometric identity systems to mobile-enabled digital payments, we’ve built infrastructure at a scale and speed that few countries can rival. According to the World Bank’s Global Findex Database 2021, 78 percent of Indian adults now own a formal financial account—up from just 35 percent in 2011. It’s a statistic that looks impressive, and it is.
But the real story lies in what these accounts are—or are not—doing. A third of them, according to the same Findex report, are inactive. Millions of Indians hold accounts they don’t use. This sobering fact signals a harsh truth: we may have solved for access, but we’ve barely begun to solve for inclusion.
The Jan Dhan-Aadhaar-Mobile (JAM) trinity gave financial accounts to the masses. It was an unprecedented push to formalize the economy and improve the delivery of government benefits. But over the years, the focus has become narrowly administrative—opening accounts, linking them to Aadhaar, transferring funds—without attending to the deeper challenge of making financial services meaningful, especially for the poor and the marginalised.
If inclusion is only measured by the number of accounts opened, we are mistaking a means for an end. A dormant account is not a tool for savings, credit, or security. It is, at best, a conduit for a government subsidy—and often, just another number on a dashboard.
Yes, the gender gap in account ownership has narrowed—from 20 percentage points in 2014 to just 6 in 2021. That’s commendable progress. But ownership alone does not ensure agency. In practice, many women in rural India depend on male relatives or banking agents to access their accounts. This undermines privacy and autonomy, and in some cases, increases vulnerability to exploitation.
A study cited by the World Bank showed that when women in a government workfare program were paid into their own accounts, rather than their husband’s, they were more likely to seek employment and exercise control over household finances. The lesson is clear: financial infrastructure must empower women, not just enroll them.
India’s digital payment ecosystem—fueled by UPI, mobile wallets, and QR codes—is often held up as a model. During the pandemic, over 80 million Indians made their first digital merchant payment. Yet beneath this boom is a digital divide that mirrors our socio-economic one.
More than half a billion Indians with accounts did not make a single digital payment in the year preceding the 2021 survey. Why? Many lack smartphones or affordable data. Others face language barriers or interface complexity. For the elderly, the illiterate, and the digitally uninitiated, even basic navigation can be daunting. And let’s not forget: digital fraud and unauthorized deductions are growing concerns, especially for low-income users.
Simply put, digital access without digital literacy breeds new forms of exclusion.
Many of those who do receive wages or benefits digitally still report frustration. According to the World Bank, one in five wage recipients in India paid unexpected or hidden fees to access their own money. Others cited distance, poor connectivity, or lack of understanding as reasons for not using their accounts.
These aren’t mere technical glitches—they’re symptoms of a deeper failure to build trust in the system. Financial inclusion must be underpinned by strong consumer protection, grievance redressal, and user-friendly design. Without these, even the best infrastructure will be met with apathy—or worse, suspicion.
India’s financial inclusion project now stands at a crossroads. The era of mass account opening is over. The real task is ensuring these accounts are used actively, safely, and productively.
This means shifting from a compliance mindset to a capability one. Policies must invest in financial literacy—especially for women and first-time users. Banks and fintechs need to design for usability, not just scalability. Regulators must crack down on predatory practices and unexpected charges. And digital payments must become not just faster, but fairer.
Inclusion is not a box to be ticked. It is a process—messy, iterative, and deeply political. It demands that we ask hard questions about who gets left out, who gets left behind, and why.
We’ve come a long way. But if we are serious about empowering every Indian financially, we must now do the harder work: transforming access into agency, accounts into action, and infrastructure into impact. (IPA Service)
