Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Inclusive growth and issues arising from it.
PMJDY: Analysis
Introduction:
Pradhan Mantri Jan Dhan Yojana (PMJDY) seems to be delivering well on its financial inclusion objectives without placing undue burden on bank. The aggregate deposits in the PMJDY accounts have grown ten-fold from the first phase of the scheme in January 2015.
The PMJDY has delivered financial inclusion:
It has contributed to financialisation of savings by giving lower income households access to a safe investment product. In the last four years, deposits in these accounts have expanded ten-fold even as the number of account holders is up only three-fold, showing that existing depositors in JDY regularly top up their balances.
With 13.5 crore beneficiaries enrolling for the low-cost accident insurance cover and 5.5 crore for the life cover, the account is giving disadvantaged folks services of other financial products as well.
With 27.7 crore account holders now armed with Rupay debit cards, their transition to electronic payments has increased as well.
Going forward:
Offering other financial services:
The Centre must nudge the banks to offer much-needed loan products to the Jan Dhan account holders.
This is critical to wean them away from the grip of usurious money lenders who extract a heavy price on their finances when emergencies strike.
Generating awareness:
The Centre and the RBI need to make sure that these first-time adopters are treated well at bank branches, know the grievance redressal mechanisms and are aware of, and protected from, the consequences of fraud or misuse of their accounts.
Changing strategy:
The sharp spike in the JDY account balances during the note ban months was a red flag.
Rather than persisting with account opening or deposit targets for banks on JDY, regulators must now ratchet up their education efforts to make sure that JDY holders are aware of their rights and don’t fall prey to benami holders or money-launderers seeking to exploit their banking access.
Conclusion:
The PMJDY is delivering on inclusion, but awareness among account holders must rise. Apart from awareness the banks need to avail most of
Connecting the dots:
PMJDY has come a long way in promoting financial inclusion. Critically analyse.
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