Pradhan Mantri Jan Dhan Yojana
Rekha Mahajan
The 2011 census revealed that two fifths of 250 million Indian households did not have access to banking services, mostly in rural areas. The absence of a basic bank account made facilities such as credit loan, insurance cover and debit cards a distant dream for this section of the population, intensifying their dependence on local sources such as moneylenders for credit related facilities. To get rid of this ‘financial untouchability’-as NarendraModi termed it- India witnessed the opening of 1.5 crore bank accounts on August 28 2014, the day of the launch of the PradhanMantri Jan DhanYojana (PMJDY). Coupled with the flagship scheme of financial inclusion through increased availability of banking facilities, it was also a step towards a cashless economy- a structural transformation that the NDA has been deeply committed to .
The PradhanMantri Jan DhanYojana,one of the biggest financial inclusion initiatives in the world turns 6 this August. The scheme has provided banking access to crores of Indians who had never stepped into a bank before.
The PradhanMantri Jan DhanYojana scheme was started to ensure that all citizens, or at least all families have access to banking.About 10 crore accounts under PMJDY were opened in 2014 and today (2020), the figure stands at 40 crore plus
When Prime Minister NarendraModi had announced the PradhanMantri Jan DhanYojana (PMJDY) scheme in August 2014, not many had imagined how popular and useful it will prove to be. Over 400 million poor now have access to banks due to PradhanMantri Jan DhanYojana .On August 19, out of the total PMJDY account holders, 63.6% were in rural areas and 55.2% accounts belonged to women. “Thanks to the PMJDY, the future of several families has become secure. A high proportion of beneficiaries are from rural areas and are women.The PMJDY has been the foundation stone for the Modi government’s people-centric economic initiatives. Whether it is direct benefit transfers (DBTs), coronavirus disease (Covid-19) financial assistance, PM-KISAN, increased wages under the MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act, 2005], life and health insurance cover, the first step was to provide every adult with a bank account, which PMJDY has nearly completed. The PMJDY became an important instrument to expeditiously provide relief to the poor under the PradhanMantriGaribKalyan Package that was announced on March 26. The package provided an amount of Rs 500 per month for three months to women PMJDY account holders.
A total of Rs 30,705 crore have been credited in accounts of women PMJDY account holders during the month of April-June.Besides, about 80 million PMJDY account holders receive DBT from the government under various schemes.
The scheme not only made it possible for the poor to begin banking, but it also enabled India’s shift to the digitalisation of banking operations and made it easy to transfer money directly to beneficiaries during the COVID-19 pandemic lockdown.
The main features of the Pradhan Mantri Jan DhanYojana (PMJDY) scheme are:
No minimum balance is required, The account holder will get Rupay debit card, Free Accident Insurance cover of Rs 1 Lakh and When the scheme was officially launched on 28th August, one more feature was included in the scheme. This feature is “Rs 30,000 will be provided as life insurance cover for all the first time bank account holders” who open the accounts under Jan DhanYojana Scheme (PMJDY).
A total of 29.75 croreRuPay cards were issued to PMJDY account holders under this scheme
At present, these accounts have a deposit balance of Rs 1.31 lakh crore, with an average deposit of Rs 3,239 per account. The average deposit per account has increased 2.5 times, which indicates increased usage of accounts and inculcation of saving habit among the account holders.Financial Inclusion is a national priority of the Government as it is an enabler for inclusive growth. It is important as it provides an avenue to the poor for bringing their savings into the formal financial system, an avenue to remit money to their families in villages besides taking them out of the clutches of the money lenders.
One of the basic objectives of financial inclusion is the delivery of financial services at an affordable cost to the vast sections of the disadvantaged and low income groups .There are nearly 1.26 lakh bank branches , of which 38 per cent are in rural areas . The government has recently doubled the límit for cash withdrawal at points of sale , for debit cards and open system prepaid cards issued by banks in India , to Rs 2,000 per day in tier III to tier VI centres .
The government also shifted the focus on accounts from “every household” to “every unbanked adult”.Besides, the overdraft limit facility was also doubled to Rs 10,000
An analysis of eights weeks’ data of shifts in the total balance of PMJDY accounts during April-May 2020 reveal the fact that beneficiaries withdrew the cash on a regular basis to tide over lack of earnings during the Covid-19 induced lockdown period.The total balance of Jan Dhan accounts was ?1,19,680crore on April 1, 2020 before the cash transfers to the account-holders by the Central and some State governments commenced as part of the relief packages. But in the following eight weeks, it diverged in a regular pattern.
By Mid April, the balance went up to ?1,33,564crore and then decreased to ?1.29 lakh crore by the end of the month. By May 13, it reached the peak at ?1.36 lakh crore and again fell to ?1.31 lakh crore by May 27.
It may be recalled that the Centre had announced a direct benefit transfer of ?1,500 to each woman account-holder of PMJDY under the PradhanMantriGaribKalyanYojana (PMGKY) in the last week of March. Some State governments too announced their own relief packages.
As per Finance Ministry data, ?10,025 crore was credited to 20 crore women in April as first installment; this was also repeated in May as second tranche.
“Before the Covid-19 pandemic lockdown days (prior to April), there was not much movement in the total balance of Jan Dhan, but after April there have been regular withdrawals in line with DBT as part of relief package, as the data shows.
On an average, the pattern of withdrawal in the last months show that about ?3000 crore-4000 crore was withdrawn by the beneficiaries per month while the toal balance surges by ?11,445 crore.
The data analysis shows two things. First, the relief package was well received by the beneficiaries and, second, the PMJDY has become an effective channel for delivery of relief.
(The author is Secretary BJP J&K UT)
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