Bridging the financial divide: A critical analysis of the Pradhan Mantri Jan Dhan Yojana

Introduction

Financial inclusion is a process of making people and enterprises, especially those who are low-income earners and from rural communities, access useful and affordable financial services like saving accounts, credit, insurance and digital payments. It seeks to bring everyone into the formal financial system to make them capable of controlling their money, saving for the future and becoming less vulnerable to economic shocks. In a nation like India, where most of the population was outside the formal banking system for many years, financial inclusion was a policy priority. Pradhan Mantri Jan Dhan Yojana (PMJDY) is an icon that has the lead role of financial inclusion plays by providing access to banking facilities to all, especially to the excluded and economically weaker sections of society. The task is gigantic and is a National Priority. According to Centre for Public Impact (2024) [1] emphasized that PMJDY has significantly increased financial access among marginalized populations, particularly low-income women and the report suggests that linking financial inclusion schemes with women-led businesses can further promote competitiveness and market dynamism. It recommends that future financial inclusion programs in India should prioritize genderconscious and women-centric approaches to maximize inclusive growth. While the initiative has achieved remarkable success in terms of account openings across both rural and urban areas a significant gap remains in the active and consistent usage of these accounts. In many regions, individuals have opened accounts under the scheme but do not use them regularly for transactions, savings, or accessing entitlements. This uneven pattern of usage is influenced by factors such as literacy levels, financial awareness, digital connectivity, and trust in formal banking systems. The similar findings were reported by Sagnik Maity and Dr. Amit Majumder conducted a nationwide comparative analysis of financial inclusion through PMJDY. Their research found significant regional disparities in account usage, attributing low activity levels to factors such as limited financial literacy, lack of trust in formal banking systems and inadequate digital connectivity in certain areas. www.extensionjournal.com

The process of development of any scheme, therefore, cannot be treated as a uniform flow like water moving through a pipe. A more accurate analogy is that of a tissue paper absorbing spilled water. When one end of the tissue is dipped in water, the liquid travels upward slowly and unevenly, depending on the paper's texture and condition. In the same manner, development programs for PMJDY need to recognize that every community receives and reacts to interventions differently in light of their own sociopolitical context, infrastructure and preparedness. This brings to the fore the imperative necessity for a context-sensitive approach to the formulation and application of public policies. Uniform delivery mechanisms may not yield the same results across different areas. Wherever the adoption is fast, it happens because of earlier awareness and support at the local level, whereas in others it happens slowly due to lack of trust, absence of documentation or social issues like gender imbalance. To bridge this gap, it becomes necessary to launch specific awareness and capacity building programs at the grassroots level. It should be done so that beneficiaries get educated regarding the advantages of financial inclusion, the need for saving and the benefits of holding active accounts. Community-level campaigns, financial literacy workshops, and partnerships with local institutions can help strengthen engagement and build trust. Ultimately for schemes like PMJDY to be truly impactful, policymakers must recognize that development must be absorbed, not merely delivered. By tailoring interventions to the realities of each region and promoting meaningful engagement with beneficiaries, the program can move beyond mere access to truly empower individuals and promote long-term financial well-being. Keeping all these points in view, the required objectives has been designed: Objectives 1. To analyze the progress and coverage of PMJDY at both national and state levels with a special focus on Haryana 2. To identify the major challenges faced by PMJDY beneficiaries in accessing and utilizing financial services [12] mentioned that PSBs have the highest number of beneficiaries, substantial deposits and lead in issuing RuPay debit cards. This extensive outreach is attributed to their widespread branch network and commitment to financial inclusion mandates and researcher called PSBs as primary drivers. The data highlighted in table 2 about Haryana state reflects a strong implementation of PMJDY across both rural/semiurban and urban/metro regions. The state has a total of 10.6 million (1.06 crore) beneficiaries under the scheme with 5.33 million in rural and semi-urban areas and 5.26 million in urban and metro centres, indicating almost equal reach across regions. On the Contrary, total balance held in Jan Dhan accounts in the state amounts to 6,879.08 crore, showcasing active usage and a growing trust in formal banking channels. Additionally, a significant number of beneficiaries 7.22 million have been issued RuPay debit cards, promoting financial transactions and digital inclusion. This data highlights Haryana's balanced rural-urban outreach under PMJDY effective account activation and contribution to national financial inclusion goals. The study was supported by Sharma and Dixit (2017) [13] mentioned that in district Jhajjar, they found that PMJDY has improved financial inclusion with many individuals opening multiple accounts. But they also observed a gap in knowledge regarding other advantages such as insurance and overdraft facilities among the account holders.

Components of the Scheme

District-wise Allotment of Sub-Service Areas (SSAs) under PMJDY in Haryana

As one of the steps taken by the Government of India to realize universal financial inclusion in Pradhan Mantri Jan Dhan Yojana (PMJDY) the idea of Sub-Service Areas (SSAs) was presented and every SSA is a circumscribed geographical area having a population of around 1000 to 1500 households with the aim of making every household accessible to fundamental banking services within a distance of 5 kilometers. www.extensionjournal.com In the context of Haryana state, a total of 4550 SSAs have been allotted across its 21 districts. The allocation of SSAs demonstrates not only the population but also the distribution of rural and semi-urban areas in the state. It can be clearly seen from the data that districts such as Hisar (401 SSAs), Fatehabad (364 SSAs), Karnal (349 SSAs), Sirsa (311 SSAs) and Sonipat (278 SSAs) have been assigned a comparatively higher number of SSAs. This suggests a greater geographical coverage requirement within such districts -perhaps because of a higher rural population and dispersed settlements, which require more banking points to deliver the last mile. In contrast, far fewer SSAs exist in other districts, including Faridabad (96 SSAs), Panchkula (74 SSAs) and Palwal (162 SSAs). These districts are comparatively more urbanized with higher densities and more developed infrastructure so that fewer SSAs can cover a large number of households because of the settled nature and presence of existing financial institutions.This wide variation in the number of SSAs per district illustrates the adaptive and need-based approach of the PMJDY framework. Rather than assigning a uniform number of banking outlets per region, the model emphasizes tailoring the coverage based on local demographic, geographic, and infrastructural realities. Moreover, the SSA-based structure under PMJDY is not merely a logistical exercise but a strategic mechanism to:

• Bridge the urban-rural financial access gap

Socio-cultural Barriers:

In some areas, especially among women, cultural and family restrictions limit independent use of bank accounts. 10. Trust Issues: Many people still prefer informal saving and credit methods over formal banking systems due to familiarity and ease of access.

These similar challenges were reported by Nidhi Walia and Jaspreet Kaur (2020) [9] concluded that banker does not provide any advice regarding used in safety of Rupay cards and lack of awareness among employees is a prominent reason which is creating a problem in their path to avail the benefits of the PMJDY. On the other hand the process of issue of Rupay card and passbook is very slow. This behavior prevents them in taking the advantage of the PMJDY scheme timely. Further study suggested that there is need to conduct financial literacy camps and bank staff needs to be trained on regular basis which will help them in assisting the people more effectively.

Technological Integration

Technology has been pivotal in PMJDY's implementation:

• Aadhaar-based verification has reduced identity fraud and duplication.

Acknowledgement

AcknowledgmentThis review article carried out under the ICSSR sponsored research project awarded by the Indian Council of Social Science Research, New Delhi. We sincerely acknowledge ICSSR for providing the opportunity and financial support to under this study.

References

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