Transformation in villages with digital financial inclusion: A case study in Karnataka villages

Abstract

India’s soul lives in its towns and villages with almost 66% of its workforce in the villages. There are two kinds of the workforce in the villages – agricultural labour and service sector labourers. Agricultural labourers earn their livelihood on farming activities within the villages. Service sector labourers move to the nearest town for working in various services like construction, hotel, hospitality, etc.  Over the last 10 years, the government of India has various digital financial inclusion schemes like Digital India, Direct benefit transfer, Rupay, UPI payments, etc. These schemes have increased the digital transactions in India as observed by many studies. Most of the existing studies on the impact of digital financial inclusion in India are based on macro economic factors. In this study, we analyse the transformations brought in Indian villages due to digital financial inclusion and propose a new Transformation Index(TI) based on both agricultural and service sector labourers. The validity of the transformation index is tested against 10 different rural areas of Karnataka. This scale is validated and reliability analysis of it is conducted through statistical tests.