Jan Dhan will have a transformative impact - Hindustan Times
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Jan Dhan will have a transformative impact

Aug 30, 2023 10:47 PM IST

The PM Jan Dhan Yojana (PMJDY) has emphasized the importance of inclusive progress and equal access to financial tools for all citizens

In the heart of flourishing democracies worldwide lies the perennial desire for inclusive growth and collective prosperity. While such ambitions are universal, they frequently find themselves trapped within a maze of bureaucratic red tape and administrative ambiguities. The Indian scenario was no different until a transformative chapter was written in its financial narrative. This change came to the forefront with Prime Minister (PM) Modi’s ascension to leadership. Among the myriad initiatives rolled out during his tenure, PM Jan Dhan Yojana (PMJDY) stands out.

The widespread nature of formal banking in India historically catered mainly to the elite, it left a vast majority underrepresented, especially in rural areas(Shutterstock Photo) PREMIUM
The widespread nature of formal banking in India historically catered mainly to the elite, it left a vast majority underrepresented, especially in rural areas(Shutterstock Photo)

This wasn’t merely an attempt at governance overhaul; it was an orchestrated effort to revolutionise the country’s financial landscape and touch lives even in its remotest corners. It began symbolically on Independence Day in 2014. PM Modi announced PMJDY with a vision that was both compassionate and far-reaching.

The widespread nature of formal banking in India historically catered mainly to the elite, it left a vast majority underrepresented, especially in rural areas where only 54% of households had bank coverage as per the 2011 Census. This systematic exclusion led to many financial challenges, such as a lack of access to formal credit and susceptibility to high-interest informal loans. For many, especially in remote regions, the complexities of the banking world seemed daunting. Data from the 2011 Global Findex highlights that only 35% of Indian adults had a formal account, with a mere 14% accessing bank loans as reported by CRISIL Inclusix in 2013.

PMJDY was conceived with a vision to correct the historical disparities. By aiming to bring every Indian into the formal banking fold, it laid the foundation for equitable growth. And the results, as time showed, were not merely on paper. Over the past decade, India outpaced its Brics counterparts in the race towards financial inclusion. A mere 35.2% of the population held bank accounts in 2011; the number surged to 77.5% by 2021, eclipsing the global average growth which went from 50.6% to 76.2% during the same period. PMJDY stands as a testament to this transformative journey. Initiated in March 2015 with 147.2 million accounts, it skyrocketed to benefit 500 million individuals by August 2023. Beyond the sheer numbers, this shift symbolises empowerment, with 55.5% of Jan Dhan account holders being women, and a commendable 67% of these accounts finding their roots in rural and semi-urban terrains. If this isn’t financial democracy, what is?

The digital crescendo of PMJDY is awe-inspiring. The uptick in UPI transactions, from a mere 92 crore in FY 2017-18 to an electrifying 8,371 crore in FY 2022-23, speaks volumes. And with RuPay card transactions at the point of sale (PoS) and e-commerce portals leaping from 67 crore to 126 crore in the same period, India is not just knocking on the doors of a digital economy, it’s smashing barriers. By pioneering direct benefit transfers (DBTs) during the Covid-19 upheaval, it championed transparency. In fact, thanks to DBT, a whopping 2.7 lakh crore was conserved by sealing potential leakages so far since 2014.

Before the advent of PMJDY, countless individuals were ensnared in crippling debt cycles, often at the hands of unscrupulous lenders. PMJDY, through its extensive outreach, offered a respite, offering not just bank accounts but also avenues for genuine financial liberation.

PMJDY was not conceived as a standalone project. It melded with other welfare programmes, serving as the monetary foundation for projects such as DBT, PM-Kisan, and MGNREGA, among others.

Furthermore, the programme has laid a solid foundation for future innovations in the banking and financial sectors. With the majority of the population now integrated into the formal banking system, the potential for advanced financial products is boundless.

In the grand tapestry of India’s economic story, PMJDY is not just a chapter but a turning point. It’s an initiative that underscores the principle that true progress is inclusive. It’s not just about Gross Domestic Product (GDP) growth rates or soaring stock indices; it’s about ensuring that the marginalised farmer in a remote village or the daily wage labourer in a bustling city has the same access to financial tools, opportunities, and security as anyone else. It symbolises the nation’s commitment to ensuring that its growth narrative is holistic, touching every citizen and resonating with the ethos of Sabka Saath, Sabka Vikas, Sabka Vishwas.

Shehzad Poonawalla is national spokesperson of the BJP. The views expressed are personal

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