PM Jan Dhan Yojana

Pradhan Mantri Jan Dhan Yojana (PMJDY), one of the world’s largest investment programmes, was announced by Prime Minister Narendra Modi on 15 August 2014. Launching the programme on August 28, the Prime Minister described the event as a celebration of the liberation of the poor from a vicious cycle. Modi was referring to an ancient Sanskrit verse: Sukhasya Moolam Dharma, Dharmasya Moolam Artha, Arthasya Moolam Rajyam – who puts the government in charge of putting people in economic activities. “This Government has accepted the job,” said the Prime Minister, and the government has kept its promise in a timely manner.

This plan ensures access to a variety of financial services such as the availability of a savings bank account, access to credit-based credit, cash withdrawal, insurance and pensions.

Guinness World Records also saw the success made under Pradhan Mantri Jan Dhan Yojana. It confirmed that “Most of the bank accounts have been opened in one week as part of the investment campaign and approved by the Ministry of Finance, Government of India.”

Contrary to the original target of opening 7.5 crore bank accounts for undisclosed families in the country on January 26, 2015, banks have opened 12.54 crore accounts since 31 January 2015 after conducting a survey of 21.06 million households with more than a deposit of Rs. 10,000. The target was set after conducting a survey of 21.02 million households in the country. Today, almost 100% coverage has been achieved. Of these open accounts, 60% are in rural areas, and 40% are in urban areas. The share of female account holders is around 51%.

Pros and Cons of Prime Minister Jan Dhan Yojana:

Pros:

1.   Unpaid banking: About 65% of India’s senior citizens still live without a bank account. The large scale of the programme has the potential to accommodate a large portion of these people. On launch day, a total of 1.5 crore accounts were opened. These accounts can bring bankers to the formal financial system where they can access many financial services such as savings, debt, cash withdrawals, and insurance. They can break free from the snare of mortgage lenders who often charge high interest rates on a temporary loan.
2. Targeted Families: The previous investment program (2011) also focuses on targeted districts. This programme is one step further and is targeted at home.
3. Technology-backed banks: The National Payment Corporation of India (NPCI) has a major role to play in this ‘financial and technological investment’. All banks and telecommunications operators have been advised to work closely with each other to provide mobile banking services to these beneficiaries. Not only smartphones but regular beneficiary phones will also be able to perform tasks such as checking the balance and transferring funds. The mode of governance supported by technology can be the allocation of natural resources or the integration of financial systems.
4.   Indian payment systems: The system and its provision of Rupay bank card is a clear indication of the promotion of Indian payment cards as compared to Master or Visa. This is in line with the Prime Minister’s approach to ‘Make in India’. With this, a large number of financial resources will be targeted at Rupay-supported programmes.
5. Leaked connections: Transfers to bank accounts are possible and beneficiaries may receive the benefits of direct communication programmes on their accounts. With this, the sale of grants can be prevented.

Cons:

1. Major responsibility for PSBs: Banks (especially the public sector) are the businesses responsible for implementing the programme. In the current macroeconomic ecosystem, all PSBs are rich, have a lot of stressed assets (bad loans and restructured loans) and often operate improperly for a number of reasons. The implementation of the plan is highly dependent on the financial performance and management of PSBs who do not have the guarantees to do so. There is some difference between the government and the RBI as well. They may affect the actual implementation of the programme.
2.   Limitations on connectivity: In many districts, under the NREGA activity, people share their money with the panchayat as part of a ‘no-co-operation’. People share their salaries with panchayat officials to be allowed half a day or to work. The programme does not address this issue.
3.   Financial information: We have not been able to produce effective financial study tools to date. A financial learning toolkit designed by the RBI and introduced in 2013 focuses on providing cost-effective ethics lessons to people rather than creating a customer-focused approach that can truly understand the client’s perspective and problem and solve it.

Conclusion

Pradhan Mantri Jan Dhan Yojana has a systematic monitoring system from the middle level to the district. At the center, the Minister of Finance is the Head of Mission and Steering Committee and Director of Mission. The programme is monitored at state level by the State and District Operations Committee by the Regional Operations Committee. Therefore, Pradhan Mantri Jan Dhan Yojana not only demonstrates an important role model in mission mode, but also demonstrates what the government can achieve if it is committed to the well-being of the people.