What is the level of financial
inclusion in India? In what way it is changing?
Financial inclusion is a way through which maximum population can get
into the bracket of having the formal financial help in one way or the other.
This very step can only be started after having the basic building block i.e.
“an account”. This same need was very well addressed by our Prime Minister in
his independence day speech, when he announced Pradhan Mantri Jan Dhan Yojna
(PMJDY) as the national mission on financial inclusion. This was directed
towards universal access to banking facilities with at least one account to
every household, financial literacy, access to credit and pension facility.
So, the bold financial initiatives and moves taken by the government in
recent past which shows the level of financial inclusion in India and how it is
expanding can be as follows-
Pradhan Mantri Jan
Dhan Yojna (PMJDY)
PMJDY provides all unbanked persons, an easy access to banking services about
financial products with the help of financial literacy programs. The RuPay
debit card which has accident insurance cover of Rs. 1 lakh and also access to
overdraft facility is also received by those people .All valid and eligible
account holders can access the account through their bank accounts. With this
account only, a person can be provided with, life insurance cover under PMJJBY,
guaranteed minimum amount of pension to subscribers under APY and accident
cover under PMSBY.
The Bank Mitra network has also gained its usage. The average number of
transactions done using Aadhaar Enabled Payment System operated by Bank Mitras
which are present in Bank Mitras, has grown by over 80x, from just 52
transactions in 2014-15 to 4291 in 2016-17.
PMJDY Account Openings by Type of Bank, as of December 2016(millions)
Pradhan Mantri Jeevan Jyoti Bima
This scheme is open to all the people in the age bracket of 18 to 50
years who have bank account and also who have given their consent to join or
enable auto-debit. The mandatory requirement for this yojna is Aadhar which is
needed for the KYC of the account. The amount covered for risk is Rs. 2 Lakh in
case of any mishappening or death of the insured person. The registered claim
till this date is 62166 and in that 59118 have already been disbursed.
Pradhan Mantri Suraksha Bima Yojana
The Scheme is available to people in the age group 18 to 70 years with a
bank account who give their consent to join / enable auto-debit on an annual
renewal basis. The statistics say that as on 31st March, 2017, the
people enrolled under this scheme is over 9.94 crore.
Atal Pension Yojana (APY)
APY was put into action on 9th May, 2015 by the Prime Minister. This
scheme is available to all people in the age bracket of 18 to 40 years who have
saving bank/post office saving bank account and the contributions differ for
those based on pension amount chosen. The perks of this scheme are that those
people at the age of 60 years, will get guaranteed minimum monthly pension of
Rs. 1K or Rs. 2k or Rs. 3K or Rs. 4K or Rs. 5K. The statistics shows that as on
31st March,2017, a sum of 48.54 lakh subscribers have enrolled to
this scheme with the total sum of Rs. 1756.48 Cr wealth.
Pradhan Mantri Mudra Yojana
This scheme has been designed for the micro units to flourish and the
amount of lone disbursed depends upon the stage of the unit. It has been categorized
into 3 phases-
Shishu- upto Rs. 50,000 (Sanctioned Rs. 85,100.74 cr.)
Kishore- between Rs. 50,000 to 5.0 Lakhs (Sanctioned Rs 53,545.14 cr)
Tarun- between 5.0 Lakhs to 10.0 Lakhs (Sanctioned Rs 41,882.66 cr)
Stand Up India Scheme
the latest scheme launched by government in the respect of giving support to
the youth to start their business in the country itself, so that country can
actually prosper. It gives loan varying from Rs. 10 Lakhs to Rs. 1crore
depending upon the requirement. The enterprise may be in any field varying from
manufacturing, services to trading sector. As per the current statistics Rs.
5,237.29 crore has been sanctioned using 25435 accounts which is actually a
great target the government has achieved.
all schemes really helped the government to push further in the financial
Fig 2 – Financial Inclusion Report
Source: RBI Annual Report 2016-17
The above table denotes the
penetration the banking and financial services have and covered the path in
last 17 years. The banking outlets in villages have been increased close to 50%
in past 7 years. It is really a good sign in terms of financial inclusion.
dynamics of financial inclusion
With the recent move of
demonetisation and introduction of Goods and Services (GST) tax, the whole
dynamics of financial inclusion is changing towards the more digitization and
broadening of tax bracket.
With the help of Unified Payment
Interface (UPI) and many digital wallets and platform, people are preferring to
go cashless which is helping the country to move to the better future. All the
major banks also have their application which provides all the services at the
fingertip. But when we consider the data for the digital and financial
literacy, it provides a bleak picture and shows a path; that it is the demand
of the hour to digitize.
GST is also a structural reform
which has subsumed all the other taxes and made the process such, as more and
more number of the businesses will have to come under the tax bracket.
These all structural reforms are
surely going to help India in going forward towards the financial inclusion