Economics Current

DBT and Jan Dhan Yojana

DBT and Jan Dhan Yojana
The Pradhan Mantri Jan Dhan Yojana, or PMJDY, is a financial inclusion program undertaken by the Government of India. It is applicable to people belonging to the age group of 18 to 65 years. It aims at expanding and making financial services such as bank accounts, remittances, credit, insurance and pensions more easily accessible and affordable for the public. This financial inclusion campaign was launched by Prime Minister of India- Narendra Modi on 15th August 2014. The program is run by the Department of Financial Services and the Ministry of Finance, Government of India. Under the PMJDY; 1.5 Crore (15 million) bank accounts were opened on the day of the inauguration itself. The Guinness Book of World Records had recognized this feat, stating: "The most bank accounts opened in one week as a part of the financial inclusion campaign is 18,096,130 and was achieved by the Government of India from August 23 to 29, 2014". As of 27 June 2018, over 31 crore (318 million) bank accounts had been opened and over 792 billion rupees (US$12 billion) were deposited under the scheme. Direct Benefit Transfer The de-duplication and reduction of fraud Direct Benefit Transfer (DBT) was started on 1st January 2013, with the aim of reforming the Government delivery system through re-engineering the existing process in welfare schemes to ensure simpler and faster flow of information and funds and also to ensure accurate targeting of beneficiaries. DBT Mission was created to act as the nodal point for the implementation of all the DBT programs. The Mission was transferred to the Department of Expenditure in July 2013. The First phase of DBT was initiated in 43 districts. 78 more districts were added later in 27 schemes pertaining to fields such as scholarships, women, child and labor welfare. A number of new scholarship schemes and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) were brought under DBT in 300 identified districts with higher Aadhaar enrolment. JAM, i.e. Jan Dhan, Aadhaar and Mobile are DBT enablers and more than 22 crore Jan Dhan Accounts, more than 100 crore Aadhaar and about 100 crore Mobile connections provide a unique opportunity to implement the DBT in all welfare schemes across the country including States & Union Territories. DBT has been said to bring efficiency, effectiveness, transparency, and accountability in the Government system by experts. Usage of modern technology and IT tools will realize the dream of” MAXIMUM GOVERNANCE MINIMUM GOVERNMENT”. Benefits of the Jan Dhan Yojana •Opening of no-frills account: The bank accounts opened under this scheme do not require any minimum balance. Overdraft facility up to rupees 10000 is also available after six months of opening the account. Interest is charged on the deposit and a free RuPay card is also issued. •Relaxation on know-your-customer (KYC) norms: Persons who do not have proper and valid identification documents can also open bank accounts under this scheme. Such an account is called a small account. •Engagement of business correspondents: Accounts are opened through business correspondents who are sometimes not available in rural regions, which is going to be reformed under the scheme. •Use of technology: Accounts will be opened under biometric information provided by the people, which would benefit illiterate people. •Direct Benefit Transfer: As explained before, the government subsidies are directly transferred to the beneficiary, which reduced delay and leakage to get service. •Insurance: Accidental insurance cover of rupees 1 lakh would be provided; life cover of rupees thirty thousand also provided to eligible beneficiaries in the event of the death.

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