Jan Dhan Yojna : Financial Inclusion at Gunpoint

Essay:

Jan Dhan Yojna : Financial inclusion at gunpoint  (1hour)

Imagine a peasant of a remote village in India paying his electricity bills using his not-so-smart traditional cell phone. Looks like I have mistaken some European country for India!  But, this is not a distant dream for India as well. The ‘Pradhan Mantri Jan Dhan Yojna ‘(PMJDY) is a stepping stone in this direction.

The Narendra Modi-led government launched one of its most ambitious projects involving the lower class, with the aim of creating at least one bank account for each lower income group (LIG) families. It started with a short term goal of creating 10 crore bank accounts, allowing zero minimum balance, under the PMJDY. Additional benefits include free insurance cover worth Rs. one lakh to each account holder. Upon completion of 6 months of account period, it covers accidental insurance worth Rs. 30,000 and a loan upto Rs. 5,000. This will allow the LIGs to deposit their savings in the bank accounts and yield interests as well. Not only will this ensure safety of their savings, but it will also generate a feeling of equality in the society. Banks which were once treated as the ‘lockers of the rich’ are now available to the poor as well.

PMJDY also covers areas such as net banking for the common and the rural public. The scheme has the goal to digitize the banking experience for common man by making net banking available on simple mobile handsets as well, thus eliminating the need of smart phones for facilities such as e-wallet.

This scheme of Modi government was expected to bring in large chunk of money to the banks, considering the fact that a large percentage of the Indian population comes under the LIGs. However, this very fact poses threats to the economy as well. Statistics show that a good number of account holders have not deposited any money or even operated the account. In the initial stages, the government was able to promote its scheme and lure people to open accounts. In fact, in the first few days, the number of accounts reached few crores, closing in to the target. But, this raises several questions. What if the government could not meet the expectations of the account holders? What if the banks could not sanction loans to all the account holders? What if most of the accounts remain inactive? Will the government be able to keep the promises it made with Jan Dhan Yojna?  Only time will tell.