Despite Jan Dhan’s success, Centre needs to move ahead in the financial sector

Prime Minister Narendra Modi hit the nail on the head when he said that nationalisation of banks by the Congress in 1969 failed to provide access to the poor but the Jan Dhan scheme did that in just 10 years since inception. While what he said was correct, he should have avoided scoring a political point over the principal Opposition party. For one, the grand old party was also serious about financial inclusion. In fact, much of the ground for the Jan Dhan scheme was prepared by the Congress-led United Progressive Alliance government in the previous 10 years (2004-14). It is true, though, that the UPA government’s approach towards poverty alleviation was essentially Left-leaning; emphasis was more on higher expenditure than on precise targeting. “When the Jan Dhan Yojana was rolled out, I remember the skepticism that surrounded it. The scale of the challenge was enormous but so was the will of the people to ensure it becomes a reality,” Modi said. Unsurprisingly, the skepticism was expressed mainly by pinkish activists and intellectuals, whose approach to any problem is invariably doctrinaire rather than practical. It goes to the credit of the Modi government that it brushed aside all criticism and misgivings about the scheme and marched ahead.

The results are impressive under any yardstick: deposit balance of Rs. 2.3 lakh crore, issuance of over 36 crore free-of-cost RuPay cards, which also provide for Rs. two-lakh accident insurance cover. Further, the account holders don’t have to pay any opening fees or maintenance charges. Also, there is no requirement to maintain a minimum balance. That two-thirds of the accounts have been opened in rural or semi-urban areas, women making 55 per cent of them, underlines the inclusive nature of the scheme. There are three more positive aspects of the Jan Dhan scheme. By relying heavily on technology, it has made the delivery of the government welfare schemes to eligible beneficiaries swift and transparent. This brings us to the second aspect: the beneficiaries are getting more than they ever before without the government spending more. This, by the way, has also brought good dividends to the ruling party, as evident from its good performance in the Parliament and Assembly elections in the last decade.

Third, the Centre has been able to weed out fake beneficiaries out of the welfare schemes. According to an official assessment, between 2017-18 and 2023-24, the government was able to save Rs. 3.35 lakh crore by removing non-deserving beneficiaries of food security, rural employment, and fuel subsidies. It found an overwhelming 50.1 million fake ration cards, 41.3 million undeserving beneficiaries of the LPG subsidy scheme, seven lakh bogus names under the Mahatma Gandhi National Rural Employment Guarantee Scheme and 17.3 million fake beneficiaries under the PM Kisan scheme! Such efforts have helped the government maintain fiscal discipline. The road ahead for the Modi government is to engage with the Opposition and states, many of which are ruled by the INDIA bloc constituents. For instance, the government wants to privatise public sector banks, which will be a good move, if and when it happens. The Congress, however, is against this. It is time the government worked to improve relations with the Opposition so that a meaningful change could be effected.