FINANCIAL INCLUSION AND 10 YEARS OF PMJDY

Pradhan Mantri Jan Dhan Yojana (PMJDY): 10th Anniversary

• Started on August 28, 2014, by PM Narendra Modi to boost financial inclusion.

Objectives:

• Provide banking access for all.

• Promote financial literacy and offer credit, insurance, and pension services.

Key Features:

• Zero-balance accounts with RuPay debit cards.
• Accidental insurance up to ₹2 lakh.
• Overdraft facility of up to ₹10,000.
• Supports Direct Benefit Transfers (DBT) for government schemes.

Achievements:

• Over 50 crore accounts; 56% held by women, 67% in rural areas.
• Deposits over ₹2 lakh crore.
• Key in COVID-19 relief disbursement.

Impact:

Empowered women and rural communities.

Boosted Digital India and cashless economy.

 Future Focus:

•  Expand access to micro-pensions, insurance, and credit facilities.
• The initiative has been crucial in bridging India’s financial inclusion gap over the past decade.

Financial Inclusion:

 Definition: Access to affordable financial services like savings, credit, and insurance for all (World Bank).

Objective: Extend financial services to underserved populations to boost economic growth.

Significance

• Credit Access: Supports MSMEs, job creation, and GDP growth.
• Savings: Encourages saving habits, increasing capital.
• Inclusive Growth: Reduces poverty, boosts education and health investment.
• DBT Savings: Saved ₹63,000 crore in FY22-23.
• Women Empowerment: 55.6% PMJDY accounts held by women.
• Supports SDGs: Helps achieve 7 out of 17 Sustainable Development Goals.

Challenges

• Demand Side: Low income, lack of awareness.
• Supply Side: Banks hesitant to serve low-value customers.
• Infrastructure Gaps: Poor connectivity and power issues, Increased risk due to digital platforms.

Financial Inclusion Initiatives in India

Kisan Credit Card (KCC) Scheme: Launched in 1998 to provide credit access to farmers.

Self Help Groups (SHG) & Joint Liability Groups (JLG):  Enable collateral-free loans.

MGNREGA Wage Payments: Payments made via banks/post offices to promote financial inclusion.

India Post Payment Banks: Provides microfinance services in rural areas.

Way Forward

• Public-Private Partnerships: Boost mobile money and digital payment services.
• Financial Literacy: Integrate financial education from schools to higher levels.
• Fintech Innovations: Use mobile banking and alternative credit scoring for affordable services.
• Tailored Financial Products: Offer microinsurance and pension schemes like Atal Pension Yojana.