Arif H. Shaikh
Shrirang A. Deshpande
Financial inclusion is, literally, at the top of the global agenda. Billions of people remain excluded from formal financial systems worldwide. Financial inclusion is a critical driver of social and economic growth, giving the world’s poor access to quality financial services to help them better their own lives. There is a long history of financial inclusion in India. It has traditionally been understood to mean opening of new bank branches in rural and unbanked areas. Nowadays, however, financial inclusion is seen to be something more than opening bank branches in unbanked areas to take formal financial services across the length and breadth of the country. In the recent years the government and Reserve Bank of India has been pushing the concept and idea of financial inclusion. In November 2005, RBI had advised banks to make available a basic banking “no-frills” account with “NIL” or very low minimum balance.
The government of India initiated The Pradhan Mantri Jan DhanYojana an ambitious programme for financial inclusion which has been rolled out across the country on a massive scale, targeting comprehensive coverage of over 20 crore households by March 2017. The GOI also initiated JAM or Jan-Dhan, Aadhaar and Mobile for transferring the government benefits to the beneficiaries directly to overcome the leakages in the system. Over 20 per cent of India’s population received a cash transfer from the government in FY14-15.
JAM was involved in distributing benefits across a range of government programs—from education and labour schemes (scholarships and MGNREGS) to subsidies and pensions (NSAP). Almost 1.2 billion bank accounts, when linked with 900 million mobile phones and about 1 billion Aadhaar numbers, would effectively ensure the subsidies reach only those who actually need them. So far, about Rs.170 billion (Rs.17000 crore) of subsidy has been saved on cooking gas alone through JAM initiative. The Union Government is now making efforts to link JAM to the supply of fertilizers to farmers & many other schemes to follow.
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