Rethinking Financial Inclusion and Women's Bargaining Power in India

Author: Niharika Sanjay Shekhawat      

INTRODUCTION

Financial inclusion in India is often measured by a single, visible marker: the bank account. Government reporting frequently cites the number of accounts opened, the value of deposits held, and the share of women among account holders as evidence of progress toward gender-equitable access to formal finance. India's Financial Inclusion Index rose from 53.9 in 2018 to 67 in 2026, and the Pradhan Mantri Jan Dhan Yojana (PMJDY) alone accounts for over 59 crore accounts, of which 55.7% belong to women. Alongside this, at least twelve states have launched unconditional cash transfer schemes that deposit money directly into women's individual bank accounts, framed explicitly as instruments of financial autonomy and empowerment.

Yet an account in a woman's name does not, by itself, establish that she controls what happens to the money within it. According to the National Family Health Survey-5 (2019–21), 44% of women who report having a bank account of their own are not in control of the money in it, and 49% of women aged 15–49 have no decision-making power over how their own money is spent at all.

THE MEASUREMENT PROBLEM: ACCESS IS NOT AGENCY

This gap between having an account and having control over it is explained by what researchers call household bargaining power. The idea is simple: when a woman receives money into an account of her own, rather than a shared or male-held one, it should give her more say in how that money is used (Kabeer, 1999). But this only works if she can actually use the account on her own, and that depends on social norms at home, not just whether a bank account exists.

This is exactly what India's financial inclusion data fails to capture. The government tracks how many accounts are opened and how much money sits in them. It does not track who withdraws that money, who decides how it is spent, or whether the account is hers in practice, not just on paper. As a result, a scheme can look successful by every official measure while the actual goal, giving women control over their own money, quietly goes unmet.

WHO ACTUALLY OPERATES THE ACCOUNT

Banking today runs through a phone, not a passbook. Every UPI payment, every withdrawal alert, every OTP that authorises a transaction goes to whichever phone the account is linked to, and that phone often isn't hers. NFHS-5 data shows only 54% of women aged 15 to 49 use a mobile phone of their own, against 91% of men. So even when the bank account carries a woman's name, the device that actually unlocks it frequently does not.

This is the part financial inclusion policy keeps missing. A woman can have her name on the account, her Aadhaar linked to it, her signature on file, and still not control it, because the OTP lands on her husband's phone. Digital banking was supposed to put more power in her hands. For nearly half of Indian women, it may be doing the opposite, quietly shifting control to whoever holds the device.

LADKI BAHIN YOJANA: A CLOSER LOOK (CASE STUDY)

Maharashtra's Mukhyamantri Majhi Ladki Bahin Yojana is arguably the most interesting test case for this entire debate, because unlike most financial inclusion metrics, it comes with direct evidence of what happens inside the household once the money lands. Launched in 2024, the scheme deposits ₹1,500 a month into the accounts of eligible women, reaching roughly 1.66 crore beneficiaries, 83% of them married, and therefore living in exactly the kind of household where bargaining power theory predicts a fight over control.

What makes this scheme worth studying closely is that a working paper by the Economic Advisory Council to the Prime Minister did something almost no other scheme evaluation does: it tracked the bank accounts of male relatives linked to beneficiaries, not just the women themselves. The finding is telling. After the transfers began, these men's own monthly spending fell by 49%, from ₹3,124 to ₹1,607, while their own balances rose 23%, from ₹8,234 to ₹10,144. That is not what happens when a household simply absorbs extra income and spends it the same way as before. It looks more like men recalibrating their own financial behaviour because the woman in the house now has money that is, in practice as well as in name, hers to decide on, an impression reinforced by the women's own spending shifting too, with education-related withdrawals rising from 18% to 24% of transactions.

That distinction matters, because it is the opposite of the pattern this article has traced so far nationally, where access rarely converts into agency. Here, at least on this evidence, it appears to. The scheme is not without its problems; auditors flagged ₹3,541 crore in excess and poorly controlled expenditure for FY2024–25, a reminder that a scheme can get intra-household power dynamics right and still be badly managed at the state level.

Not every women-targeted scheme fares as well once it meets the ground. Maharashtra's Pink E-Rickshaw scheme, launched the same year, explicitly bars anyone other than the woman beneficiary from driving the vehicle, yet on-ground observation in cities suggests this rule is not always followed, undercutting the very objective the scheme was designed to serve. Where Ladki Bahin shows that a well-designed transfer can shift bargaining power even amid financial mismanagement, Pink E-Rickshaw is a reminder that good intentions written into scheme rules do not enforce themselves. As a case study in whether policy design can genuinely shift who controls money and opportunity at home, Ladki Bahin comes closer to succeeding than the national numbers, or its own sister scheme, would suggest.

WHY OWNERSHIP DOESN'T ALWAYS MEAN CONTROL

The reasons behind this gap have less to do with banking and more to do with who a household expects to control money. Research shows that when a wife earns more than her husband, couples often report lower marital satisfaction, a sign that financial control is tied to gender roles, not just income (Bertrand et al., 2015). In many households, a wife's income, however it arrives, gets folded back into a family budget that the husband still manages, not because the account rules require it, but because that is simply how decisions have always been made.

This may explain a more troubling pattern in NFHS-5: some women report that a male partner has withdrawn or spent their personal savings without their knowledge, a practice more common when the partner is less educated. This is not a banking failure. It is a household one, and no amount of Aadhaar-linking or biometric verification changes who a family believes should hold the purse strings.

Yet this same research suggests the norm is not fixed. In Assam, women receiving the state's Orunodoi cash transfer reported that access to independent income improved their bargaining power at home, largely because men began recognising their financial contribution to the household for the first time. Beneficiaries in West Bengal described a similar shift, saying they no longer needed to ask a husband or in-law for money, a small change with outsized effect on daily dignity. In short, a woman's account can be emptied of both money and meaning by the very norms that decide who is "supposed" to be in charge, but those norms are not permanent, and cash transfers appear to be one of the few tools capable of nudging them.

THE QUESTIONS REFORM KEEPS AVOIDING

The evidence in this piece raises a harder question than it answers. If a working paper can uncover, almost by accident, that a scheme shifted household spending patterns within months of launch, why does that kind of tracking not exist by default for every women-targeted transfer in the country? What does it say about how India measures success that this insight came from economists studying bank data years later, rather than from the scheme's own design?

The phone problem raises a similar question. If nearly half of Indian women cannot receive an OTP on a device of their own, is a bank account in her name actually a meaningful unit of financial inclusion, or has policy simply moved the same old barrier from the bank branch to the smartphone? And if rules like the ban on male drivers under Pink E-Rickshaw already exist on paper but go unchecked in practice, is the failure really about policy design at all, or about a deeper unwillingness to ask what happens after a scheme is announced?

None of these questions have easy answers. But a financial inclusion policy that keeps counting accounts instead of asking them is one that will keep mistaking activity for progress.

CONCLUSION

This piece has more evidence than answers. It is easier to show that a woman's name on an account doesn't guarantee her control over it than it is to say exactly what would fix that, because the causes sit in bank policy, phone access, and household habits all at once, and no single reform touches all three. What the data does make clear is that India has gotten good at counting women in, accounts opened, transfers made, boxes checked, and much less practiced at asking whether they were actually let in. That question doesn't have a clean answer yet. But it is, at minimum, the right one to be asking.

REFERENCES

1. Bertrand, M., Kamenica, E., & Pan, J. (2015). Gender identity and relative income within households. Referenced via: AEA Conference Paper, "The Impact of Digital Financial Transactions on Women's Bargaining." here

2. Ghosh, S. K., & Shagishna, K. (2026). Unconditional Women Cash Transfer Programmes in India. Economic Advisory Council to the Prime Minister (EAC-PM) Working Paper. here

3.  IWWAGE – Institute for What Works to Advance Gender Equality. Women's control over their economic resources: Evidence from NFHS-5. here

4. Kabeer, N. (1999). Resources, agency, achievements: Reflections on the measurement of women's empowerment. Development and Change, 30(3), 435–464. 

5.  ORF – Observer Research Foundation. Cash Transfers as an Instrument for Poverty Alleviation and Women's Empowerment in India. here

6.  The Print. Maharashtra, Odisha women cash schemes drive financial autonomy, alter household spending—EAC-PM paper. here

7. Deccan Herald. Maharashtra's Ladki Bahin financial aid scheme mainly benefits married women: study. here

8.  Superkalam (UPSC Current Affairs). Why is Maharashtra's Ladki Bahin scheme under scrutiny? here

10.  Business Standard. 26% of Jan Dhan accounts with PSBs inactive as usage slows under PMJDY. here

11.  UNFPA India. Asset Ownership by Women in India: Insights from NFHS Data. here

12.  GovtSchemes.in. Maharashtra Pink E Rickshaw Scheme. here