Opinion: A Revolution in Financial Inclusion

Intro:Government is providing tools for people to improve their quality lives and gain dignity in pursuit.

The new Indian government, under the leadership of Prime Minister Modiji, is launching India into the 21st century by pursuing a compelling nationalist agenda. Our economic philosophy is to empower our citizens with the tools to improve their lives while boosting the productive capacity of the Indian economy.
An important initiative in this direction is the launching of the Pradhan Mantri Jan-Dhan Yojana (PMJDY) for financial inclusion. Jan-Dhan literally means people’s wealth, and we intend to bring prosperity to everyone through an efficient and streamlined system. We plan to conduct the biggest financial inclusion drive in world history, by providing bank accounts to 7.5 crore unbanked households. There have been many attempts at increasing financial inclusion in India so far, but none of them have been successful because they did not take the ecosystem approach. This programme, however, benefits all elements of the financial inclusion ecosystem and creates the right incentives to expand banking services to the unbanked.

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Our approach towards expanding financial inclusion is by creating a win-win situation for all stakeholders. The most important stakeholders, the unbanked households, should be very eager to pursue this programme, as not only do they get bank accounts, but also several other attractive benefits. They get an accidental insurance cover of Rs 1 lakh, life insurance of Rs 30,000, overdraft facility of Rs 5,000, and the RuPay debit card—all of which add convenience to their daily lives and facilitate their entrepreneurial endeavours.
Secondly, we need an army of lakhs of business correspondents to reach out to the unbanked households. These Bank Mitras will get a healthy remuneration of at least Rs 5,000 a month, which will be a strong incentive for them to get new bank accounts opened, attend to the customers’ needs and make the entire process convenient for unbanked households. We are hopeful that thousands of people in the service sectors, any kirane-wala or pan-wala will be motivated to make extra income, and thus help us in executing this ambitious programme.

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Finally, the government, which itself is a stakeholder, will be able to distribute welfare benefits to citizens more efficiently. This efficiency would primarily be achieved by enhanced convenience and reduced leakage of benefits. A massive research study led by Prof Karthik Muralidharan from the University of California on biometric smartcards in India has shown that direct benefits transfer reduced leakage of funds between the government and beneficiaries, by about 12 per cent. It has also shown that payments were collected in 20-30 per cent lesser time. Hence, the government’s aim of social welfare will be served better, and at the same time this method would be much more cost efficient.
The NDA government’s economic philosophy is to move away from the UPA approach of entitlements and consumption-led growth to empowerment and investment-led growth. The people of India do not want hand-outs, they want jobs. The people of India do not want empty rights, they want concrete opportunities. The people of India do not want to stay poor; they aspire to join the middle class. In its earlier stint (1998-2004) too, the NDA government had started projects such as the Kisan Credit Card and the Pradham Mantri Gram Sadak Yojana, which enabled people to improve their lives. Likewise, the new government will provide people with tools to improve the quality of their lives and gain dignity in this pursuit. We will truly empower our people by providing them dignity and prosperity.
Jayant Sinha (The writer is a Lok Sabha-MP of BJP from Hazaribagh, Jharkhand and an IITian Delhi)

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