Socio-economic impact evaluation of Pradhan Mantri Jan Dhan Yojana in Chikkaballapur district of Karnataka

Introduction

Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national mission on financial inclusion having an objective of providing every household with essential financial services. Prime Minister Narendra Modi announced PMJDY in the Independence Day address on August 15, 2014 and it was launched on August 28, 2014. The main objective of PMJDY is to ensure universal access to banking through Basic Savings Bank Deposit Accounts with zero minimum balance. The scheme also provides RuPay debit cards, accidental insurance, overdraft facilities, Direct Benefit Transfer (DBT), mobile banking and linkages with social security schemes such as PMJJBY, PMSBY and Atal Pension Yojana. Through these measures, PMJDY seeks to integrate excluded households into the formal financial system and improve their economic security. Since its inception, PMJDY has achieved remarkable progress. As on 22 nd April 2026, about 58.18 crore accounts were opened under the scheme. Deposits in these accounts crossed ₹304195.65 crore, reflecting growing participation and trust in formal banking institutions. In Karnataka alone, the scheme recorded 21,622,378 beneficiaries with deposits amounting to ₹14,409.60 crore [1] . The scheme has also strengthened the JAM Trinity-Jan Dhan, Aadhaar, and Mobile-which has improved welfare delivery through direct transfers and digital payments.

The impact of PMJDY is particularly important at the district level, where rural households often depend on informal credit sources and cash-based transactions. Chikkaballapur district of Karnataka, being semi-arid and predominantly agrarian, offers a suitable setting for evaluating the outcomes of the scheme. Households in the district largely depend on agriculture, horticulture, wage labour, and small businesses. Access to formal banking can help them mobilize savings, receive government benefits directly, access credit and reduce dependence on moneylenders. PMJDY accounts may promote regular savings habits, improve financial security, increase use of digital payments and create awareness about insurance and pension products. Women may gain greater control over household finances through direct benefit transfers, while farmers and labourers may benefit from timely payments and easier transactions. However, challenges remain such as inactive accounts, limited awareness of account operations and insurance claims, inadequate branch facilities, network problems and dependence on intermediaries. Few studies show that the PMJDY scheme has been more effective in the states with higher levels of illiteracy (Dilip et al., 2022) [2] . Therefore, assessing the impact of PMJDY in Chikkaballapur district is essential to understand its actual benefits at the grassroots level. The findings can help policymakers, banks and www.extensionjournal.com administrators formulate better strategies for improving account usage, financial literacy and inclusive growth.

Methodology

Study area

The study was conducted in Chikkaballapur district of Karnataka, one of the financially included districts in the state. It has also been reported that Chikkaballapur district has achieved 100 per cent financial inclusion under PMJDY scheme.

Sampling and Data collection

The data was collected using a pre-tested structured questionnaire prepared for the study. Mixed sampling method was adopted for the study to collect the necessary information from all the beneficiaries and Business Correspondents (BC's) of PMJDY scheme. Twenty PMJDY beneficiaries were selected randomly from each taluk, which makes total sample size of 120.

Analytical tools and techniques Descriptive statistics

Descriptive statistics is a method to collect, organizes, summarise, display and analyse sample data taken from a population. In the present study, descriptive statistics such as mean and percentage were used for analysing the data.

Tabular analysis

Tabular presentation was used to compile the socioeconomic profiles; benefits availed by PMJDY account holders, satisfaction level of account holders from the scheme. The statistical tools like percentages and averages were used to interpret the results.

Chi Square Test

Chi Square Test of Independence is a statistical method to determine whether there is any relationship between two variables. The data is displayed in 'r*c' contingency table, where 'r' is row and 'c' is column. The value of Chi Square Test of Independence is calculated by using the formula,

Where, χ 2 STAT: Chi Square Test of Independence value O i: Observed value of variable and E i: Expected value of variable Degrees of freedom is calculated by using the formula, df = (r-1)(c-1)

Where, df: degrees of freedom r: number of rows c: number of columns

Null hypothesis

Assumes that there is no relationship between two variables.

Alternative hypothesis

Assumes that there is a relationship between two variables. If the calculated value is greater than the table value null hypothesis is rejected, if the calculated value is lesser than the table value null hypothesis is not rejected.

Results and Discussion

Socio-economic characteristics of PMJDY account holders Table 1 presents the socio-economic profile of PMJDY beneficiaries across different socio-economic profile. The findings revealed that, majority (66.7%) of beneficiaries were female, highlighting women participation in the scheme and supporting financial inclusion objective of the scheme. These findings are in line with the findings of Shivangi and Seema (2019) [3] . With regard to age, the beneficiaries were distributed across all age groups, with the highest proportion (30%) above 50 years, followed by 27.5 per cent in the 40-50 years group, 25 per cent in the 31-40 years group, and 17.5 per cent in the 21-30 years group. In terms of education, 36.7 per cent of the beneficiaries had primary education, 31.7 per cent were illiterate, 18.3 per cent had secondary education, and 12.5 per cent were graduates, indicating participation from diverse educational backgrounds, likely due to the benefits offered under the scheme. By social category, a majority of beneficiaries belonged to SC/ST communities (58.3%), followed by OBC (31.7%) and general category (10%), reflecting greater participation by socially disadvantaged groups. Nearly three-fourths (67.5%) of the respondents belonged to small families consisting of one to four members, whereas 26.7 per cent had five to six members and only 5.8 per cent had more than six members. Occupation-wise, the largest proportion of beneficiaries (27.5%) was engaged in agriculture, followed by unemployed persons (21.7%), employed persons (17.5%), business activities (14.2%), and unskilled/wage workers (13%). Business activities mainly included petty shops and small local enterprises, while the unemployed category largely consisted of housewives and elderly persons. These findings are consistent with the studies of Nithyashree and Mounica (2023) [4] and Shallini et al. (2024) [5] , who also reported farmers as major beneficiaries of the scheme. Income analysis revealed that most beneficiaries belonged to economically weaker sections, with 56.7 per cent earning less than ₹1 lakh annually, 29.2 per cent earning between ₹1-2 lakh, and 14.2 per cent earning ₹2-3 lakh per year, indicating that the PMJDY scheme largely benefited lowincome households and fulfilled its objective of providing banking access to economically weaker groups

Gender wise impact of PMJDY

The gender wise grouping of benefits availed by PMJDY account holders was assessed to know the impact of scheme on gender, specifically to the female group and the results are depicted in Table 2.

Out of the 76 account holders who opened bank account for the first time, more than three fourth (84.21%) were female and less than one fourth (15.79%) were male. Out of 50 account holders who availed loans, 41 account holders were female and only 9 were male. More than three-fourth of the account holders (81.03%) were female who were eligible for insurance and rest (18.97%) were male from the total of 58 The findings are not on par with the results of the study conducted by Gururaja and Ramesha (2019) [6] , which indicates that male have higher general awareness compared to females across all parameters. Whereas the results were on par with the study conducted by Usha G and C. Sumangala, 2024 [7] , which showed that Women with better financial awareness and supportive household environments have used PMJDY accounts independently. www.extensionjournal.com

Impact of PMJDY across different income groups

The PMJDY account holders were grouped according to income levels to know the impact of scheme on the poverty level, and the results are presented in the Illiterate individuals and those with primary education show higher participation in financial activities such as opening first accounts, availing loans, and accessing government schemes, indicating greater dependence on basic financial services. Engagement gradually declines among individuals with secondary education and further decreases among graduates and postgraduates. This suggests that higher educational attainment is associated with greater financial independence and reduced reliance on governmentsupported financial services.

Impact of PMJDY across different Category

The PMJDY account holders were grouped according to their category, which is presented in

Relationship between Socio-economic characteristics of PMJDY account holders and benefits availed by them

The χ 2STAT 10.4071 > Critical value 9.488 for gender, hence the null hypothesis is rejected. The Chi-square test was found significant at 5 per cent level, indicating benefits availed were dependent on gender. Females have availed more benefits with respect to opening of bank account for the first time, usage of RuPay debit card, DBT, availing loans and life insurance, indicating that scheme has mainly focused on bringing financial literacy and security for women (Table 7). The χ 2STAT 6.66773 < Critical value 21.026 for age, hence the null hypothesis of independence is accepted. There was no relationship between age of account holders and the benefits availed. It shows that all the age groups made use of the benefits offered under the PMJDY scheme. The younger age group of 20-30 years comprises mostly of students and was found to have been benefited comparatively less by the scheme, since majority might already be covered by the financial benefits through other bank accounts. The χ 2STAT 8.650558 < Critical value 26.296 for education, hence the null hypothesis of independence is accepted.

There was no relationship between education level of the account holders and the benefits availed by them since the benefits of the scheme were not just availed by educated group but also by illiterates. This result in converse with the results of the study by Swati Dutta and Balwant Singh Mehta, 2021 [8] , which showed that, education played an important role in the active use of PMJDY bank accounts. The χ 2STAT 3.774004 < Critical value 15.507 for income, hence the null hypothesis of independence is accepted. The Chi-square test was not significant, indicating there is no relationship between income of the account holders and the benefits availed. This suggests that the benefits of the scheme extended across all income groups, with a significant focus on those earning less than Rs. 1 lakh per annum. The χ 2STAT 8.33291 < Critical value 15.507 for category, hence the null hypothesis of independence is accepted.

There is no association between category of PMJDY account holders and benefits availed by them, since the benefits of the scheme were not just availed by SC/ST category group but also by OBC. The benefits were mostly less utilized by General category compared to the other two categories. These results align with the findings of the study by Vinod Kumar Bagar and Rajeev Sijariya, 2020 [9] .

Level of satisfaction of account holders from PMJDY scheme

The satisfaction level of PMJDY account holders were analyzed and the results are given in Table 8. It was found that 44.2 percent of account holders were highly satisfied from the scheme, almost half (48.3%) of them were moderately satisfied. 7.5 per cent of them indicated that they were least satisfied from the scheme and none of them were not satisfied from the PMJDY scheme. The scheme leaves account holders unsatisfied for two main reasons; one is high interest rates on the loans and the requirement to keep the account operative in order to get benefits. Lower income account holders find it difficult to maintain their accounts open because they are unable to maintain a balance in the bank and make relatively few transactions. These findings are in accordance with the results of the study by Bharata Chandra Sahoo and Vishal Sood, 2022 [10] , which found that advanced banking services have a greater impact on customer satisfaction.

Conclusion

The study on the impact evaluation of Pradhan Mantri Jan Dhan Yojana (PMJDY) in Chikkaballapur district of Karnataka reveals that the scheme has played a significant role in promoting financial inclusion among rural and economically weaker households. PMJDY has successfully extended formal banking services to previously unbanked sections of society by providing zero-balance accounts, RuPay debit cards, insurance facilities, overdraft opportunities and Direct Benefit Transfer (DBT) benefits.

The findings if the study is supported by results of the study conducted by Singh A. P., 2019 [11] , which showed that PMJDY scheme has made a significant contribution in providing access to financial services. Overall, PMJDY has emerged as an effective instrument for strengthening financial literacy, reducing dependence on informal credit sources, improving access to government welfare schemes, and enhancing economic security of rural households in Chikkaballapur district. However, issues such as inactive accounts, limited awareness about insurance and digital banking facilities and operational difficulties still need attention. Therefore, continuous financial literacy programs, improved banking infrastructure and regular monitoring are essential to ensure sustained usage and long-term success of the scheme.

References

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