With the rise of a new government to power, the nation witnessed a dawn of new policies, schemes and reforms. And the most primal of the schemes with which BJP manifested its’ campaign was the “Pradhan Mantri Jan-Dhan Yojana”, also known as JDY. So, as a citizen, it is important for us to understand the objectives, the model and the result of such a scheme. The following article is an analogy of the JDY scheme and its’ relation with future growth aspects of the country.

The objective of the scheme was to expand and provide affordable access to banking facilities like bank accounts, credit, insurance and pension which was promoted under the head of Financial Inclusion campaign, proposed by the Prime Minister, Narendra Modi, on 28 August 2014. Following were the key features of the scheme:-

  1. The bank accounts would be provided to the holders with no minimum balance policy.
  2. RuPay debit cards will be issued.
  3. A cover of Rs. 1 lakh would be provided as accidental insurance.
  4. After the 6 months of the opening date, holders will become eligible for Rs.5,000 overdraft from bank.
  5. With the advancement in technology, a person can perform financial transaction even with a normal phone.
  6. Mobile banking for poor would be available through National Unified USSD Platform (NUUP).

Keeping all these points in mind, the scheme proves to be a promising model for the development of the country, but the outcomes are both negative and positive. In the period of four years, the first half witnessed convincing results. A notable number of bank accounts were opened, by the end of the year 2014, an approx. of 4.52 crore bank accounts were opened. The balance of accounts under this scheme rose by more than Rs.270 billion and 19 lakh household availed the facility of overdraft in the year 2016. With so many accounts being opened, the financial institutes of the country observed a rise in liquidity rate of currency and thus provided a positive picture.

But, apart from the good aspects of the scheme, it also had some flaws. Many economists, opposition, and financial institutes claimed that the features like zero balance, free insurance and bank overdraft will create chances for duplication. Demonetization also paved way for the problems, for example, the unavailability of 2000 and 500 notes to do the changeover created chaos among the citizens. Moreover, the governor of RBI permitted banks to charge some extra fees from the people if they do ATM transactions beyond a certain limit in a month. All these discouraged people to use bank facilities and thus the second half of the scheme saw a downfall. The number of bank accounts opened after 2016 dropped gradually, further the use of bank services like credit services also witnessed a fall.  For the smooth functioning of any system, it is imperative for it to run in a continuous and constant manner, but the gradual fall in policies over the years  gives a disturbing picture of the scheme

To conclude this article, I would like to say that this scheme faced the evil of incompetent future planning. The government did not come up with any provisions to counter the fall. In the long run, the scheme was able to achieve only one of its’ objective i.e.. to have bank accounts opened, other objectives such as the use of banking facilities and access to formal credit did not reach marginalized and poorer section of the country too much extent. Hence, is accurate to say that this scheme requires a major formulation to become successful in long run.

By- Somya Jain ( Team Member- Navaagat)


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