| Abstract: |
Digital financial inclusion (DFI) has emerged as a transformative force in reshaping economic landscapes, particularly in developing economies like India. This paper investigates the impact of digital financial inclusion on productivity enhancement and poverty reduction in the Indian context. The primary objectives are to examine the relationship between DFI indicators and economic productivity, and to assess how digital financial services contribute to poverty alleviation. Employing a descriptive-analytical research methodology, the study utilizes secondary data from RBI, NPCI, World Bank, and Ministry of Finance sources spanning 2017–2025. The hypothesis posits that increased penetration of digital financial services significantly enhances labour productivity and reduces multidimensional poverty. Results demonstrate that UPI transaction volumes grew from 0.92 billion in FY 2017–18 to 185.8 billion in FY 2024–25, while India's poverty rate declined from 16.2% to 2.3% (2011–2023) at the $2.15/day international poverty line. The RBI Financial Inclusion Index rose from 43.4 (2017) to 67.0 (2025), confirming progressive financial deepening. The discussion highlights that PMJDY's 55.98 crore accounts and UPI's 491 million users have created a robust digital ecosystem directly linked to productivity gains and poverty reduction. The paper concludes that India's digital financial architecture serves as a replicable model for inclusive economic development. |
