Digital Financial Inclusion and Its Impact on Economic Growth in India: An Analytical Study Towards Viksit Bharat @2047

Abstract

Digital financial inclusion has emerged as a transformative force driving inclusive economic growth in India. This study investigates the relationship between the expansion of digital financial services—particularly Unified Payments Interface (UPI), mobile banking, digital payments, and fintech innovations—and key macroeconomic outcomes including GDP growth, formal credit access, poverty reduction, and economic formalisation during the period 2016–2025. Drawing on secondary data from the Reserve Bank of India (RBI), National Payments Corporation of India (NPCI), Ministry of Statistics and Programme Implementation (MOSPI), and the World Bank Global Findex Database, the analysis demonstrates a strong positive association between digital transaction volumes and economic growth indicators. The findings reveal that the rapid scaling of digital payment infrastructure has facilitated formalisation of the economy, improved last-mile delivery of government benefits through Direct Benefit Transfer (DBT), expanded credit access for micro, small and medium enterprises (MSMEs), and supported consumption-led recovery in the post-pandemic period. Despite these gains, challenges including the rural–urban digital divide, cybersecurity risks, limited digital literacy, and uneven regional adoption continue to constrain the full potential of digital finance. The study concludes with policy recommendations aimed at strengthening digital infrastructure, enhancing financial literacy, and refining regulatory frameworks to accelerate India’s progress towards the vision of Viksit Bharat @2047.