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The Pradhan Mantri Jan Dhan Yojana (PMJDY) will not only be about opening basic bank accounts for unbanked families, but also be about transferring subsidies of welfare schemes directly into the accounts of beneficiaries.
The flow of subsidy payments through this route will, in due course, encourage bankers to focus their energies on such basic accounts and even provide overdraft and other facilities.
As on date, not all subsidy payments of the Central Government are credited directly to a beneficiary’s bank account. Many ministries make their subsidy payments through cheques or sometimes even by cash.
PMJDY is a national mission on financial inclusion to be launched by Prime Minister Narendra Modi on August 28. It seeks to provide two bank accounts to each of the 7.5 crore identified unbanked families across the country.
Besides a basic banking account, a Rupay debit card with an inbuilt accident insurance cover of ₹1 lakh will be provided.
The DBT programme was rolled out by the previous United Progressive Alliance (UPA) Government on January 1, 2013 for transferring subsidies of welfare schemes through the Aadhaar-linked platform.
Since June 1 last year, the UPA Government had initiated transfer of LPG subsidy through the DBT programme, under which consumers were paid a cash subsidy to enable them buy LPG cylinders at market prices. But this was put on hold in March this year following complaints that not all consumers had Aadhaar or bank accounts to get this subsidy.
The proposed PMJDY would also cover the issuance of Kisan Credit Card as Rupay Kisan card.
Two phasesIn the PMJDY’s first phase—August 15, 2014 to August 14, 2015—all households will be covered with at least one basic bank account. Routing of subsidies to such accounts under DBT will also be done in this phase.
The second phase—August 15, 2015 to August 14, 2016— would involve providing of micro-insurance and unorganised pension schemes such as Swavalamban through business correspondents.
The major shift in the PMJDY, as compared to the financial inclusion efforts of the erstwhile UPA Government, is that households are being targeted instead of villages. Moreover, both rural and urban areas are being covered against the rural focus earlier.
The present plan will pursue digital financial inclusion with special emphasis on monitoring by a mission headed by the finance minister.
Meanwhile, the Finance Ministry has urged State Chief Ministers’ to launch PMJDY on August 28.
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