NEW DELHI: The program was launched a decade back for the betterment of the marginalised groups and has since proven to be a major success.
On August 28, India celebrated 10 years of Prime Minister Narendra Modi’s flagship program, Pradhan Mantri Jan Dhan Yojana (PMJDY) which was launched a decade ago with an aim to bring the marginalised and the economically backward under the banking fold. Since the launch of this much publicised scheme back in 2014, it has proved to be a major success for the Modi government with data suggesting that it has hugely benefitted women.
Gender equality
According to the statistics, out of the total 53.13 crore Jan Dhan accounts, over 30 crore are women’s accounts which means that nearly 80% of this are women beneficiaries, highlighting gender equality in financial access. As of Aug 14, 2024, there were over 53.1 crore beneficiaries with total deposits of over Rs 2.3 lakh crore.
Bridging the rural-urban divide
Over 65% of the accounts are either in rural or semi-urban areas, manifesting that the government’s aim to diminish this divide has proven a master stroke. This program has played a significant role in empowering downtrodden communities and reducing the gender gap in financial services.
Total deposits
As of August 14 2024, the total deposit balances under PMJDY accounts stand at Rs 2,31,236 crore, reflecting a 15-fold rise in eight years.
Boost to digital economy
The issuance of over 36 crore RuPay cards under this flagship program, has fuelled the growth of digital transactions in the country. As the data suggests, it has contributed to a surge in digital payments, which increased from 2,338 crore transactions in FY19 to 16,443 crore in FY24.
RuPay debit card with inbuilt accident insurance
The beneficiaries under this scheme receive a free RuPay debit card with accident insurance coverage of Rs 2 lakh (or Rs 1 lakh for accounts created before August 28, 2018).
Inclusion into other government schemes
A key aspect of this scheme is that the accounts under it are integrated with Direct Benefit Transfer (DBT) and other schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY) and the Micro Units Development & Refinance Agency Bank (MUDRA) scheme. All these scheme have hugely impacted marginalised communities, indicating the rise of the lower strata as India nears the century of its independence.
Recieving global praise
The scheme has garnered global praise for its transformative impact on financial inclusion in India. In 2023, a G20 report by the World Bank reveals that India has achieved its financial inclusion goals in just 6 years, a feat that would have taken 47 years without its advanced Digital Public Infrastructure. At a time when India is emerging as a global power amidst the turbulence in the geopolitical arena, such a massive achievement gives it a strong position.
Surpassing China in financial inclusion
According to the SBI report of 2021, India has surpassed China in financial inclusion metrics. Mobile and Internet banking transactions soared to 13,615 per 1,000 adults in 2020, up from 183 in 2015, while the number of bank branches per 100,000 adults rose to 14.7, exceeding those in Germany, China, and South Africa.
Dip in alcohol and tobacco consumption
The same report observed that states with higher PMJDY account balances saw a drop in crime rates and reduced alcohol and tobacco consumption, highlighting the program’s positive social impact.
Key challenges
Despite the success and applaud it received, both at the national and global level, it faces huge challenges, including around 8.4% of accounts with zero balances and approximately 20% of accounts being inactive. Similarly there are other concerns also such as infrastructural limitations, illiteracy, threats of fraud and misuse (when cyber crime has emerged as a massive threat to the financial sector) and others.
Addressing these challenges is pivotal for maintaining this scheme’s effectiveness and ensuring that it continues to serve its intended purpose.