Post-demonetisation: 23% Jan Dhan Accounts still without balance
Jan Dhan Accounts are zero-balance accounts specifically meant for bringing below poverty line population under the ambit of financial inclusion initiatives of the government.
The Union Government on 12 December 2016 announced that around 23 percent of Jan Dhan Accounts are without balance even after demonetization.
This development is a worrying factor for the policy makers because it can be considered as an indication of low-income capacity and purchasing power among the lower strata of the society.
Significance of Jan Dhan Accounts
• These are zero-balance accounts specifically meant for bringing below poverty line population under the ambit of financial inclusion.
• They are opened as part of the Pradhan Mantri Jan-Dhan Yojana which was launched on 28 August 2014 by the Prime Minister Narendra Modi.
• The Jan Dhan Accounts provide a variety of financial services including insurance, debit card and credit facilities to the account holders.
• Within five months of its launch, the around 11.5 crore accounts were opened under the scheme covering 99.74% of targeted household.
• Since its inception, around 25 crore Jan Dhan accounts were opened across the country till 7 December 2016. And, a total of Rs 74609 crore was deposited in these accounts so far.
• After the demonetisation announcement on 8 November 2016, the government expected that even poor people who are using these accounts will be driven towards using these accounts on a large scale.
• However, it was revealed that these accounts are used by black money hoarders.
• Jan Dhan Accounts became an important part of JAM trinity of the Union Government since 2015. The JAM stands for Jan Dhan Accounts, Aadhaar and Mobile connectivity.
• Significantly, around 14 crore bank accounts have been seeded with Aadhaar numbers so far.
• The JAM is an important instrument for the government to provide direct cooking fuel subsidies under the Direct Benefit Transfer (DBT) scheme.