Empowering women in India through financial independence

In India, despite strong economic growth only 21% of women participate in the workforce limiting their economic independence and decision-making power within households (World Development Indicators, 2021). To address these gaps, the government launched two key initiatives: the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which provides 100 days of manual labor annually for households with limited employment, and the Pradhan Mantri Jan Dhan Yojana, which promotes financial inclusion by facilitating direct digital payments of wages and social benefits into individual bank accounts.

While these programs have increased financial access for women, challenges remain in ensuring that they control their earnings especially as the government gradually introduces direct payments to personal accounts for individuals with limited recent workfare experience. Studies indicate that enabling more women to receive payments directly could significantly enhance their financial autonomy (Field et al., 2021). Responding to this need, the government is advancing efforts to bring inactive female workers into the digital payment system, with the potential to empower millions across the country.

The Women’s Initiative for Socioeconomic Empowerment India project will conduct an impact evaluation in 90 blocks in Madhya Pradesh to test the impact of a two-part intervention on women’s financial independence, gender norms, and labour force participation. This two-part intervention includes:

• Setting up direct deposits of Mahatma Gandhi National Rural Employment Guarantee scheme wages: Women’s Initiative for Socioeconomic Empowerment India assists women in receiving wages directly into their own bank accounts giving them control over their earnings.

• Financial training through-two approaches: Women will be provided training on MGNREGS, and navigating financial services and direct benefits transfers either through a light touch approach (training of trainers through Self Help Group leaders) or an NGO-led approach (training provided by NGO staff).

By comparing the impact of the SHG-led approach to a more traditional NGO-led approach, the impact evaluation proposed will not only focus on impact of the training but also shed light on how readily the government can distribute information through SHG networks by combining two successful government initiatives with widespread reach in rural India (SHG networks and MGNREGS).

The Women’s Initiative for Socioeconomic Empowerment India project aims to evaluate if supporting women with direct wage deposits and financial training can empower them to participate in government work programs, ultimately increasing their economic independence and decision-making power. Initial research has demonstrated that giving women control over their income helps address household barriers that might prevent them from working, supporting this theory of change.

In the short term, the project seeks to empower women by enabling them to access and control their own wages through biometrically linked bank accounts, which provides a practical means for women to engage in work and manage earnings independently. Training on navigating the Mahatma Gandhi National Rural Employment Guarantee Scheme system further supports women by giving them the knowledge to demand work and understand the payment process, addressing common challenges they face.

Over time, these changes should lead to improved household welfare as women’s income opportunities grow, increasing their influence within the household. The success of this approach could create a scalable model for empowering women financially, encouraging greater economic participation and autonomy for women in rural India.