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.
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