2nd partWhat is the level of financialinclusion in India? In what way it is changing? Financial inclusion is a way through which maximum population can getinto 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 inhis independence day speech, when he announced Pradhan Mantri Jan Dhan Yojna(PMJDY) as the national mission on financial inclusion. This was directedtowards universal access to banking facilities with at least one account toevery household, financial literacy, access to credit and pension facility. So, the bold financial initiatives and moves taken by the government inrecent past which shows the level of financial inclusion in India and how it isexpanding can be as follows- Pradhan Mantri JanDhan Yojna (PMJDY) PMJDY provides all unbanked persons, an easy access to banking services aboutfinancial products with the help of financial literacy programs. The RuPaydebit card which has accident insurance cover of Rs.
1 lakh and also access tooverdraft facility is also received by those people .All valid and eligibleaccount holders can access the account through their bank accounts. With thisaccount only, a person can be provided with, life insurance cover under PMJJBY,guaranteed minimum amount of pension to subscribers under APY and accidentcover under PMSBY. The Bank Mitra network has also gained its usage. The average number oftransactions done using Aadhaar Enabled Payment System operated by Bank Mitraswhich are present in Bank Mitras, has grown by over 80x, from just 52transactions in 2014-15 to 4291 in 2016-17.
Fig 1-PMJDY Account Openings by Type of Bank, as of December 2016(millions) Pradhan Mantri Jeevan Jyoti BimaYojana (PMJJBY) This scheme is open to all the people in the age bracket of 18 to 50years who have bank account and also who have given their consent to join orenable auto-debit. The mandatory requirement for this yojna is Aadhar which isneeded for the KYC of the account. The amount covered for risk is Rs. 2 Lakh incase of any mishappening or death of the insured person.
The registered claimtill this date is 62166 and in that 59118 have already been disbursed. Pradhan Mantri Suraksha Bima Yojana(PMSBY) The Scheme is available to people in the age group 18 to 70 years with abank account who give their consent to join / enable auto-debit on an annualrenewal basis. The statistics say that as on 31st March, 2017, thepeople 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. Thisscheme is available to all people in the age bracket of 18 to 40 years who havesaving bank/post office saving bank account and the contributions differ forthose based on pension amount chosen. The perks of this scheme are that thosepeople at the age of 60 years, will get guaranteed minimum monthly pension ofRs.
1K or Rs. 2k or Rs. 3K or Rs. 4K or Rs. 5K.
The statistics shows that as on31st March,2017, a sum of 48.54 lakh subscribers have enrolled tothis 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 theamount of lone disbursed depends upon the stage of the unit.
It has been categorizedinto 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 This isthe latest scheme launched by government in the respect of giving support tothe youth to start their business in the country itself, so that country canactually prosper. It gives loan varying from Rs. 10 Lakhs to Rs. 1croredepending upon the requirement. The enterprise may be in any field varying frommanufacturing, services to trading sector.
As per the current statistics Rs.5,237.29 crore has been sanctioned using 25435 accounts which is actually agreat target the government has achieved. So, theseall schemes really helped the government to push further in the financialinclusion path.Fig 2 – Financial Inclusion ReportSource: RBI Annual Report 2016-17The above table denotes thepenetration the banking and financial services have and covered the path inlast 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.Changingdynamics of financial inclusionWith the recent move ofdemonetisation and introduction of Goods and Services (GST) tax, the wholedynamics of financial inclusion is changing towards the more digitization andbroadening of tax bracket.With the help of Unified PaymentInterface (UPI) and many digital wallets and platform, people are preferring togo cashless which is helping the country to move to the better future.
All themajor banks also have their application which provides all the services at thefingertip. But when we consider the data for the digital and financialliteracy, it provides a bleak picture and shows a path; that it is the demandof the hour to digitize.GST is also a structural reformwhich has subsumed all the other taxes and made the process such, as more andmore number of the businesses will have to come under the tax bracket.These all structural reforms aresurely going to help India in going forward towards the financial inclusionjourney.