Do cash transfers build women’s agency in India?

The politics of welfare in India has become increasingly gendered, with cash transfers emerging as both a social policy instrument and an electoral strategy. Just weeks before Assembly elections, the Bihar government has rolled out the Mukhyamantri Mahila Rojgar Yojana — a ₹10,000 transfer to 75 lakh women as seed capital for self-employment. The goal is to help them start or expand small enterprises, with up to ₹2 lakh in additional support for successful ventures.

This joins a list of women-focused cash transfer programmes, such as Karnataka’s Gruha Lakshmi, West Bengal’s Lakshmir Bhandar, Madhya Pradesh’s Ladli Behna Yojana, and Telangana’s Mahalakshmi. These are powered by India’s Direct Benefit Transfer (DBT) architecture, anchored on the ‘JAM trinity’ of Jan Dhan accounts, Aadhaar, and mobile phones. This infrastructure enables targeted delivery and transparency.

As of August 2025, over 56 crore Pradhan Mantri Jan Dhan Yojana accounts have been opened, with women owning 55.7% of them. According to the World Bank’s Global Findex Database 2025, 54% of Indian women reported opening their first bank account primarily to receive government benefits or wages. With 89% of Indian women now holding a bank account — on par with developed nations and far above the global average of 77% — India has achieved a remarkable milestone in recognising women as economic actors with a formal financial identity. The chart below shows the proportion of women who own bank accounts.

At the heart of this progress lies a critical question: can direct cash empower women as economic agents rather than just welfare recipients? DBT schemes have been shown to enhance women’s visible control over resources. Research shows that income in a woman’s name increases her say in household decisions and improves outcomes for children and the elderly. Therefore, schemes such as Bihar’s can represent the first formal recognition of women’s economic identity.

However, beneath the impressive numbers, the story is more complex. Despite the JAM push leading to near-universal account ownership by women, around 20% remain dormant due to insufficient funds, low perceived need, or discomfort in engaging with formal banking. In rural and semi-urban areas, distance from bank branches and the digital divide worsen this disengagement.

Moreover, a large number of women use their accounts primarily to withdraw the cash transfers — usage for savings, borrowing, or payments remains low. The chart below shows women’s engagement in financial activities using bank accounts (%)

Although 38 crore RuPay cards (which come free with Jan Dhan accounts) have been issued and UPI transactions have surged from ₹2 crore in FY17 to ₹18,600 crore in FY25, women’s usage of debit cards as well as digital payments continues to lag behind men’s.

Apart from patriarchal norms, a low level of digital access has prevented the proliferation of bank accounts from translating into sustained savings, credit uptake, or active digital transactions for women. Women are 19% less likely to own mobile phones (as per GSMA), which are needed to access information about accounts and funds. Data from the Findex survey shows that the costs of phones and data, lack of privacy, fear of cyber fraud, and social norms prevent women’s ownership of mobile phones.

Shared phone access for a large number of women further limits independent digital banking. Financial and digital literacy remain significant barriers. In fact, more than two-thirds of Indian women still rely on male relatives to make financial transactions. The chart below shows mobile access and its usage for financial transactions among women

Therefore, India’s leap from access to agency for women remains incomplete. So, for schemes such as Bihar’s Rojgar Yojana to become genuine instruments of economic empowerment, they need to move beyond simply placing money in women’s bank accounts. Beneficiaries require complementary long-term support.

Most importantly, building genuine financial agency will require giving women control over assets by providing them with secure property rights and joint land titles. Only when women have tangible control over land or business assets can they leverage credit, participate in markets, and engage in new forms of commerce.

Equally critical is strengthening the ‘mobile’ pillar of the JAM trinity. Subsidised smartphones and affordable data plans would allow women to access their accounts and digital payment tools independently, avoiding reliance on shared devices that erode privacy and autonomy. Banks, fintech, and mobile operators must co-create financial products that reflect the realities of women’s informal, seasonal, or sporadic incomes; caregiving responsibilities; and limited financial and digital literacy.

Community-based confidence networks can bridge the trust gap. Initiatives such as digital banking sakhis and secure WhatsApp or UPI groups can offer trusted spaces for women to seek advice, share experiences, and resolve doubts collectively. Another priority should be to expand the number of female banking agents — less than 10% of India’s 1.3 million business correspondents are women.

The path to real empowerment lies in coupling access with agency-building — ensuring women can not only receive money but also control, grow, and sustain it for their own advancement.

Shravani Prakash, Jiya Bharti and Riya Khanna are with ICRIER’s Economic Policies for Women Led Development Program