10 years of PM Jhan Dhan Yojana
Kartavya Desk Staff
Syllabus: Government policies and intervention
Context: The government is celebrating 9 years of completion of Pradhan Mantri Jan-Dhan Yojana (PMJDY) in revolutionizing financial inclusion in India.
What is financial inclusion?
It is ensuring access to financial services and credit for vulnerable groups at an affordable cost. In India, it’s vital for development and progress. Access to a transaction account is a key step, allowing storage, payments, and transfers, acting as a gateway to broader financial services.
What is PMJDY?
The PMJDY, the world’s largest financial inclusion mission, reached a significant milestone by surpassing 500 million accounts after nine years since its launch.
About the scheme:
Key Successes of PMJDY:
Aspects: | Examples
Achievement | By July 2024, over 52 crore Jan Dhan accounts were opened. Nearly 100% of villages have banking outlets within 5 km as per the Jan Dhan Darshak App. The average deposit in PMJDY accounts grew 4.12 times from 2015 to 2024, and zero balance accounts decreased to 4.26 crores from 8.52 crores in March 2015.
Women Empowerment | Increased financial inclusion for women; over 55% of accounts belong to women
Rural & Semi-Urban Focus | Extending banking facilities to underserved regions; 67% of accounts opened in these areas
RuPay Cards | Offering insurance benefits to account holders; About 340 million were issued with ₹2 lakh accident insurance cover
Inclusion | Empowering financially vulnerable sections; Brought marginalized sections into the formal banking system
Financial Benefits | Enabling individuals to save and transfer funds securely; Savings brought into the formal financial system, remittance opportunities, freedom from usurious money lenders
Role in Welfare | Direct Benefit Transfers (DBT) using PMJDY accounts; Used to distribute welfare packages without pilferage, including COVID-19 financial assistance, PM-Kisan, MGNREGA, and insurance covers
Digital Platform | Providing easy access to banking services; the Jan Dhan Darshak app locates banking touchpoints
JAM Architecture | Facilitating direct transfer of government benefits; Part of JAM (Jan-Dhan, Aadhaar, mobile) system for subsidy delivery and benefits transfer
Formalisation of Financial System | It provides an avenue for the poor to bring their savings into the formal financial system, an avenue to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders
Conclusion:
Efforts are being made to provide micro-insurance coverage to PMJDY account holders, with eligible individuals being targeted for inclusion in schemes like PMJJBY and PMSBY. To facilitate this, acceptance infrastructure is being established across the country. Moreover, steps are being taken to enhance the access of PMJDY account holders to micro-credit and micro-investment options such as flexi-recurring deposits.
Insta Links:
• Pradhan Mantri Jan Dhan Yojana
Mains Links:
Pradhan Mantri Jan Dhan Yojana (PMJDY) is necessary for bringing the unbanked to the institutional finance fold. Do you agree with this for the financial inclusion of the poorer section of Indian society? Give arguments to justify your opinion. ( UPSC 2016)
Prelims Links:
‘Pradhan Mantri Jan-Dhan Yojana’ has been launched for (UPSC 2015)
(a) providing housing loans to poor people at cheaper interest rates (b) promoting women’s Self-Help Groups in backward areas (c) promoting financial inclusion in the country (d) providing financial help to the marginalized communities
Ans: (c)