The Pradhan Mantri Jan Dhan Yojana (PMJDY) announced by the BJP-led NDA government at the Centre, which has promised almost a moon to a large segment of population, is a very good scheme on paper. What remains to be seen is if it is implemented properly or goes the way other schemes have?
By Nivedita Bhardwaj, TwoCircles.net
New Delhi: Remote hilly Lawngtlai district of Mizoram with sparse population has 20 sub-service areas (SSA) and all of them have been covered under the survey for the Pradhan Mantri Jan Dhan Yojana (PMJDY).
Telangana’s population according to 2011 Census is 3,52,86,757 and government statistics is showing that as on date a total of 61,93,711 accounts, one per household at least, have been opened under the PMJDY. Of these, 37,24,039 are in urban areas while 24,69,672 are in rural areas.
Narendra Modi (Courtesy: NewsGram)
Purely from a social perspective, the PMJDY – the Jan Dhan Yojana – has meant financial inclusion for all those segments of the society which were not included in the economy for various reasons. Just a glimpse of the statistics gives an idea about the financial exclusion. Census 2011 had estimated that out of 24.67 crore households in the country, 14.48 crore (58.7%) households had access to banking services. Of the 16.78 crore rural households, 9.14 crore (54.46%) were availing banking services. Of the 7.89 crore urban households, 5.34 crore (67.68%) households were availing banking services.
The ambitious Pradhan Mantri Jan Dhan Yojana is an attempt to bridge this gap. It featured prominently among the “achievements” of the one year old BJP-led NDA government. Almost 14 crore bank accounts have been opened across India till March 2015. If implemented properly, the scheme has the potential to ensure financial inclusion of almost 80% of the population, kept away so far from sharing India’s economic growth.
The information brochure (http://www.pmjdy.gov.in/Pdf/PMJDY_BROCHURE_ENG.pdf) prepared by the government for the scheme claims all six lakh villages across India are to be mapped according to the Service Area of each bank (both public sector and private banks have been roped in) to have at least one fixed point Banking outlet catering to 1000 or 1500 households, called as sub service area (SSA). This will be covered through a combination of branch banking and branch-less banking by way of business correspondent agents of respective banks.
The government has promised to plug leakages to minimum as it claims that one by one all benefits/subsidies (DBT) will be deposited in these bank accounts directly, all compensations or claim amounts (jan suraksha, insurance for the poorest of the poor, is the next step in this direction) and all this while maintaining zero balance accounts. The financial inclusion plan also has three social security cover schemes viz. Pradhan Mantri Jeevan Jyoti Bima Yojana; Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana.
The hurdles
This does not mean all is hunky dory. It is the fine print that will set the tone for success of the scheme. For instance, the account holder gets RuPay card with the account opened under PMJDY. But the fine print says the account holder will be eligible get the accidental insurance benefit only if he/she has used the RuPay card once in every 45 days.
But this is only one part of the problem. Who gets the claim without any hassles remains to be seen. For, the account holder does not get any paper telling him that he will get an insurance for so-and-so amount. The claim settlement can become a tedious procedure given the kind of semi-literate, illiterate gentry of the account holders, who will not only be not aware enough of their entitlements but also be unaware of the procedural intricacies involved for financial literacy.
The least talked about hurdle are the problems associated with the banking sector. First is the operational cost that the banks (both public sector and private sector banks) will have to bear for the ‘zero balance account’. Most bank – even if the account holders go in for over draft or not – will find it difficult to maintain these accounts for a zero balance.
Another hidden cost for the banks is the burden these additional accounts would put on the already thin staff. The public sector banks, especially in the rural areas, are fighting a major manpower crunch as it is and even with the technological innovations (e-banking, core banking and on-line banking etc), the field staff will need to reach out to account holders in rural areas, especially those which do not have electricity connections or internet connectivity. That is where the manpower crunch will be felt most.