Pradhan Mantri Jan Dhan Yojana: Impact after Demonetization

Prime Ministers Jan dhan Yojana is India’s National Mission for financial inclusion to ensure access to on an affordable manner. The Financial inclusion scheme was launched by Prime Minister of India Narendra Modi on 28th August 2014; He had announced this scheme on the first Independence after he took oath as PM of India on his first Independence Day speech on 15 August 2014. Its run by Department of Financial services, Ministry of Finance, on the inauguration day, 1-5cr  bank accounts were opened under this scheme,Guiness world records recognizes the achievements made under PMJDY, and says that “The most banks accounts opened in 1 week as a part of financial inclusion campaign 9s 18,096,130 and was achieved by Banks in India from 23 to 29 August 2014” By 1st June 2016, over 22 cr. (220 Million) bank accounts were opened and Rs.384.11billion (US$5.7billion) were deposited under the scheme.

What was the purpose behind this Yojana?

The Scheme was mainly inducted with the aim of providing universal & clear access to banking facilities starting with “Basic Banking Accounts” with overdraft facility of Rs.5, 000 after six months and RuPay debit card with inbuilt accident insurance cover of Rs.1 Lakh and RuPay Kisan card. In next phase, there will be Micro insurance & pension etc.will also be added.

Under this Scheme –

  1. Account holders can open their A/c with zero balance account,
  2. After 6 months of opening of the A/c holders can avail Rs. 5,000 (US$74) overdrafts from the bank.
  3. With the help of New Technology introduced by National Payments Corporation of India, a person can transfer funds. Check their balance through a normal phone.
  4. Mobile banking for poor would be available through National Unified USSD Platform (NUUP) for which all banks &mobile companies have come together.

Now post Demonetization, Jan Dhan accounts swell with Dhan, let me a give a detailed analysis of the impact of it

Demonetization’s aim mainly was to target the rich with unaccounted money but the planners never thought that the scheme would make the poor rich and bring in a new concept called Benami Deposits. And this is exactly what happened if one looks @ Jan Dhan Yojana bank accounts opened for the poorest of poor but are now swelling with cash since November 8. There is no need for any financial wisdom to understand this to conclude that these accounts have become holders of somebody’s account. What we find is the poor have been used by those with hordes of unaccounted for money to park their funds. According to sources Jan Dhan accounts were increasing Rs.5, 000 to Rs.50, 000 of cash deposits each in most of the zero-balance accounts. Post November 8th the scenario has changed, a majority of them have witnessed the first ever transactions in the past two years, ever since they were opened, a senior bank officer revealed. PM Modi clearly stated that cash deposit up to Rs.2.5lakh would not come under the scanner of the Income Tax Department, more & more people were queuing up to utilize this opportunity of Jan Dhan accounts for the junked Rs.500 & Rs.1000 notes. The sudden deposits after Nov.8th, in these accounts which were lying defunct for the past almost two years, chances of unaccounted money can’t be ruled out. The chances of such benami transactions are higher in Chandigarh, which boasts of 21 lakh saving bank accounts for a population of about 11 lakh.

I feel that Demonetization move will result in a windfall of Rs.3Lakh cr.to the RBI. Highly placed sources say that after targeting black money hoarders, the government, has to send a strong signal to poor farmers, among others, that benefits are given to them, a reward for their hardship, perhaps.

Jan Dhan Deposits will definitely prove to be a game changer– This step, if taken properly, can impact Assembly elections next year, 2017. There is also a strategy of BJP winning an election the core vote bank of traders& middle class, but one can’t ignore the Garib or Kisan. The main agenda of Modi government at the moment is Empowerment of Poor. Rural economy has also impacted after Demonetization, as farmers have no cash to buy manure, ahead of the cropping season. “Some people are using Jan dhan Yojana accounts to deposit black money. Up to Rs.50, 000 can be deposited in Jan Dhan Yojana accounts” told Economic Affairs secretary Shaktikanta Das. The decision was taken after PM Modi held a second review meeting on on Demonetization with the officials of the finance Ministry& RBI. The legitimate account holders would not put to any kind of difficulty; however the source of deposits of above Rs.50, 000 would be verified. Jan Dhan account holders should not allow other people to use their accounts to convert their black money into white. Banks are also keeping a close watch on these accounts.

Cash deposit limit in Jan dhan Yojana account set at Rs. 50,000—it’s a good move by Government, even this limit for Jan Dhan Yojana I find is quite high. I feel PMModi has laid concrete roads from every location to the banks. We find huge money is flowing through that. Poor people should never be allowed to be exploited at any cost by the unscrupulous– even the limit is very high, that many zero balance may be used for the purpose. The objective of PMJDY, under this scheme we find that nearly58 lakh Pensioners bank accounts to come under Pradhan Mantri Jan dhan yojana.Under the Pradhan Mantri Jan Dhan Yojana as many as 24.46 cr. New bank accounts have been opened while there are 24 cr. Families. More than 7 crore people have Kisan Credit card. Hardly any family has been left from the banking sector. Farmers can also open in mandi their accounts. Political parties are just spreading rumors. More than 75% of people have not been affected by Demonetization .In a village economy we find very few people take bigger currency for trading rather do with smaller currency of Rs.50 or 100 Notes in open Mandis. Most of the villagers buy their grocery through local grocery shops on credit mostly. But in Mandi traders they say the business is dropped by 50% how this can happen?

In Mandi there was an initial impact, this is a big, bold decision since post-Independence period, hence some impact is likely to happen, still farmers were allowed to withdraw up to Rs.25, 000, & the buyers or Agents has been allowed to withdraw their commission up to Rs.50, 000 per week. In Mandi, the farmer payment is delayed & he takes a loan from whom he sells his produce. This amount is sufficient for a week.  There are no problems for farmers as necessary arrangements are made in Mantis  so that they can withdraw money from there. In coming day everything will become cashless. Out of 100 people, 75 of them have no issues at all. 20 % may face this teething problem, but they also feel this is a welcome move by our PM Modi.farmers have no issues at all, whereas in the name of farmers many big political leaders have issues, They will not succeed in their motives, as 99% of people are for this move in support of Demonetization. Farmer will not be levied any tax. Initially, people of this country faced some panic but this move was welcomed by majority of Indian population. Farmers in villages have always had smaller currency notes.

The impact of this move on upcoming Elections—

Our PM’s Goal was always for the welfare of the Nation not politics. It is the most popular decision taken by the Government of India. Post-Independence era. There will be no impact of Demonetization on UP Elections too. Our PM Modi’s goal is to move the Nation towards Vikas.

But political leaders in AAP & Congress in their party are affected with this move as such. The leaders might be influencing the party heads and hence they are taking the stance. This is not the case with our PM, as he thinks about the welfare of the Nation. There are three types of farmers, the first one is NCR farmer close to cities, the second one will be living in hinterland, and the last one is Baudhik (Intelligent) farmer living in cities, who actually has a problem. The common farmer might have faced some trouble- in arranging money or standing in queues, but he is very happy with this historic decision made by our PMModi for ‘Empowermentof Poor& Middle class Indian’. Demonetization is the last nail in the coffin against Black Money towards cashless Economy, for a better & brighter future, moving India Vikas Ki Aur.

Jai Hind

Dr.S.Sukanya Iyer











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