When the NDA Government led by Narendra Modi came in power in May 2014, there were millions of Indians who still did not have a bank account. Decades had gone since the nationalisation of banks, but financial inclusion still remained elusive to millions in our country.
The Jan Dhan Yojana was launched in mission mode to ensure financial inclusion for all. In a short span of two years, 23.93 crore bank accounts have been opened. What is more heartening is the fact that Rs 41,789 crore have been deposited in these bank accounts. There will be millions of people whose lives would become stable with the help of savings they are able to generate with the help of a bank account. Doors of institutional credit have also opened for millions of people, who till now were captive to lenders and their high interest rates. The Jan Dhan Bank Account has also features over draft, insurance, etc like which are being used widely. An initial criticism of the Jan Dhan Yojana was the number of zero balance accounts. But the proportion of zero balance accounts to total bank accounts have been continuously falling, implying that a vast majority of people are using the bank accounts.
With the fast pace of opening of Jan Dhan Accounts, NDA Govt’s vision of JAM trinity started falling in place. The Government moved very fast with Aadhar enrolments. While 65 crore Aadhar enrolments happened till 30 May 2014, the Govt opened another 35 crore. Today 105 crore Indians have an Aadhar card. Almost every Indian today has a mobile phone. Thus, an entire enabling architecture was in place, through which Government could transfer subsidies or any Govt benefits. It was now possible to identify the right person and transfer money right into his bank account, without any middlemen or delay. The Govt has now enabled Direct Benefit Transfer for schemes, and transferred crore directly into the bank account of the beneficiaries. This has stopped leakages and diversions and resulted in savings of in the last 2 years. Rs 61,822 crore has been directly transferred to 31 crore beneficiaries in 2 years. Due to various reform initiatives under DBT, about Rs. 36,500 Cr has been saved by eliminating bogus beneficiaries & leakages.
Micro, Small & Medium Enterprises play an important role in our country. They not only provide millions of jobs, but are also important contributors in our economy. But it has been observed that only a small fraction of them receive institutional finance, with the majority firms being forced to take credit from money lenders.
The NDA Government launched the Mudra Yojana to help these small entrepreneurs with cheap, collateral free finance and give scale to their aspirations. In the year 2015-16, Rs 1,32,954.73 crore were disbursed against a target of Rs 1,22,188 crore. A total of 3.48 crore entrepreneurs received finance. Of these, 1.25 crore were new entrepreneurs, who received Rs 58,908 crore. A whopping 79% of the beneficiaries were women, who received Rs 63,190 crore. The loan disbursement target for Mudra Yojana in 2016-17 has been increased by 50% over the previous year to Rs 1,80,000 crore.
The above initiatives have resulted in a paradigm shift in the lives of Indians. From not having basic facilities like bank accounts, to getting bank accounts with multiple features and easy, collateral free finance; a lot has changed for India’s poor since May 2014. Subsidies and benefits are no longer hostage to middlemen or require multiple visits to a Govt office. With DBT & JAM, transfer of benefits has become easy, efficient and transparent.
