How Successful is Pradhan Mantri Jan Dhan Yojana?
Suraj Kumar
Freelance SEO Content Writer | Tech & Financial Writer | B2C, B2B, D2C | Strategy Creation & Implementation | Social Media | Exploring the Field of EGovernance, Specific to India's Economic Growth
Launched in 2014, Pradhan Mantri Jan Dhan Yojana (PMJDY) is one of the substantial government initiatives that has not only met but exceeded the primary objectives. PMJDY has become a significant pillar of the financial inclusion plan to touch every Indian household and even those untouched by financial services - such as savings, banking, and insurance - after the independence of India.?
According to government data, as on December 30,2022, PMJDY's total account balance stood at Rs 1,80,857 crores. Additionally, about 47.84 crore beneficiaries opened their zero balance account under this scheme.?
What is Pradhan Mantri Jan Dhan Yojana?
Pradhan Mantri Jan Dhan Yojana (PMJDY) is one of the major financial inclusive programs led by the Indian government to provide necessary financial services to Indian households in an affordable and timely manner.?
Due to the major impact of PMJDY, it also refocused on unbanked Indian populations - who were forced to rely on unorganized financial channels like local money lenders that used to charge exorbitant interest rates - to provide the necessary financial services like banking, low-interest credit, insurance, and pension.?
How is Pradhan Mantri Jan Dhan Yojana Different from Other Government Schemes?
The primary objective of the PMJDY scheme is to give easy access to organized financial services to every Indian household at an affordable cost and on time. Secondly, opening a basic bank account (i.e., Zero Balance Savings Account) is another focal point of this inclusive financial program led by the central government.?
Initially, the Govt. of India reached out to people (not having a bank account) through special events requesting them to open their account under the PMJDY scheme. The government partnered with public and private banking service providers to facilitate this special program effectively and conveniently, spreading this initiative in urban and rural areas.
However, the government also faced many bottlenecks in implementing this scheme successfully because people were required to fill out a long account opening form and provide a list of documents; the entire process used to take a lot of time.?
Thus, the government developed many policies to make opening bank accounts easier under the PMJDY program.?
Special Features of Pradhan Mantri Jan Dhan Yojana That Attracted Indian Households
Here are some key features that attracted Indian households and even unbanked populations to open their account under the PMJDY scheme.?
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What are the Major Impacts or Success of Pradhan Mantri Jan Dhan Yojana?
PMJDY has enabled the government to send its social welfare fund directly to the beneficiary via Direct Benefit Transfer (DBT) system.?
Whether it requires transferring COVID-19 financial assistance, wages under MGNREGA, payment of health insurance cover, or any other welfare fund, it now directly gets transferred to the beneficiary's account without any leakage, which reflects PMJDY has achieved its primary goals set by the government.
Another impact of PMJDY is that it has even touched the large percentage of the Indian population living in rural areas, which for years remained untouched by formal financial and banking facilities.
About 32 crore beneficiaries of PMJDY live in urban and semi-urban areas. In contrast, about 15 crore accounts are opened and operated from rural areas.?
Under the scheme, about 32.53 crore RuPay debit cards were given to make the digital banking systems more accessible and straightforward.?
According to RBI data, the zero balance account stood at 8.2% as of August 2022.?
Another official data states about 100% of households in 26 states and union territories are now connected with the banking system. In comparison, the remaining 9 states and union territories have successfully connected 99% of households with banking systems.?
However, the opening was not only the aim of Pradhan Mantri Jan Dhan Yojana; keeping this account active was also a major concern and primary goal of this scheme. To address this major problem, the government includes a provision to transfer government welfare schemes like subsidy transfer, pensions, insurance cover, and wages under MGNREGA through PMJDY accounts of beneficiaries. The government also used these accounts to provide COVID-19 assistance funds to the needed people.?
According to RBI's report, there were 46.25 crore accounts by the end of August 2022; and 37.57 crores (around 81.2%) accounts were fully operational. Compared to August 2015, the PMJDY account balance increased by 7.6 times, and the number of accounts increased by 2.58 times in August 2022.?
Additionally, the average account balance per PMJDY account is Rs 3,761, which is 2.9 times higher than the average account balance of August 2015.
Summary
Pradhan Mantri Jan Dhan Yojana has not only met but also exceeded expectations. It has successfully linked India's urban, semi-urban, and rural (especially unbanked people) populations with banking systems, ensuring proper transfer of social welfare funds, reducing poverty, and promoting economic growth with the effective implementation of various government schemes.?