India has bridged the gender gap to bank over 500 million people in the last 9 years, enabling potential access to the benefits of a formal economy. EPISODE #141
Informative and interesting article! Agree with you that Jan Dhan Yojna has led to the financial inclusion revolution. The JAM trinity ( jan dhan- aadhar - mobile) has made public service delivery more efficient and transparent.
However, despite the visible progress, the growth in account activity such as ATM transactions ,short term credit, insurance, overdraft facility etc is slow . RUPAY cards were given to each account holder but according to govt data at least one in five card is dormant.Also , nearly 20% of these accounts have zero balance. We all remember these Jan dhan accounts saw , unusual cash deposits during demonetisation in 2016.
You are right about dormant accounts. Please see this in a context--not to justify. Till 2022, 415 million were poor and did not have a bank account. Now, they have a bank account and they are not poor--but does not mean that they are rich either. This kind of transition will take many years; as the BIS study points out, this level of financial inclusion will take 5 decades to achieve. India pulled it off in 9 years!
All these measures will translate into visible change only a few years from now. Keep our fingers crossed.
It's truly impressive that you highlight issues which one normally takes for granted- be it electricity, drinking water or bank accounts. We have always known about bank accounts even before we knew how to operate them. It's really a great achievement in such a short span. It's a pity that it's ninth anniversary went unnoticed. Having said that, it's equally commendable that you are able to keep track of such anniversaries and achievements considering that no one else does!
It's really heartening that more than half the account holders are women. Whether a lady is an earning member or not, the onus of running a household eventually falls on her. It may not be apparent but it's surely a balancing act between earnings and expenditure. Gone are the days when women had to hide money in provision boxes or tucked away in a corner of the cupboard. Her savings for a rainy day. Now she can save money in her own account. Not only will that generate more money and more importantly no one else can misuse it without her knowledge.
The acronym JAM actually explains in a nutshell the reason for the amazing success of this ambitious scheme. The point to be noted is there have been massive savings to the exchequer despite providing so many benefits. Money saved is money earned. All in all, a win win situation.
Thank you so much for the kind words of appreciation. Much appreciated. So glad that these pieces resonate with you.
You are absolutely right. In the age of digital banking, anyone, including women, can use their phone to save. transact money. It is like you say a massive piece of empowerment. Which unfortunately we take for granted. All these empowerments are incrementally forcing a change in society. India is still a work in progress, but matters are visibly improving. It is the power of compounding--little incremental change then assumes exponential pace.
Some startling statistical analysis Anil, the inclusion of women and outreach to rural and semi urban areas, for opening bank accounts were for me, the standout progress. This leadership has not shied away from tackling the seemingly insurmountable tasks, plaguing India, whether it was Swachh Bharat mission, opening Jan Dhan accounts and now provision of tap water in every household. Previously the easier paths to progress were adopted by adding to the GDP by making the rich richer or modernizing the urban areas. The herculean efforts required to uplift the masses, has started now. This has been at last realized that we can only grow as a whole country. In the latter part of your article, I would like to point out that the CBDT had made E - filing of Returns compulsory from 2013 - 14, by a notification in May 2013, for persons having an assessable income exceeding Rs.5 lacs. The process today, linking Aadhar with Bank accounts has resulted in the huge increase in filing of ITR. A very enjoyable and informative podcast with a thought provoking article. Keep jogging our Grey cells Anil.
Thank you and so glad you liked the post. And thank you for summing up the changes, especially the nudge that India's gradual transition to a rules-based regime is providing to ensure better compliance. Slowly and steadily the way we live, eat, save, play is witnessing an unprecedented reset. Hopefully, all this change will augur well for the country.
Hello Anil: Apart from the always excellent summary that you have provided regarding this revolution, perhaps the most significant fact in your column for us to consider is that the anniversary went relatively unnoticed. Without sounding like some kind of revolutionary agitator, I think this reflects the gap in thinking between many of the elites and the people on the ground.
One of the big changes that has come as a result of having a PM who has emerged from the masses is that his priorities reflect the masses’ priorities. This reflects the profound democratization that has been underway over decades, dating back to when Gandhi stunned the elite-dominated Congress in the 1910’s and 1920’s by taking the freedom struggle to the masses.
In an odd way, China’s early Long March Communist leaders, including Deng Xiaoping, even though they were dictatorial, were closer to the masses than our early post-independence leaders, coming from common clay, very earthy and practical. Modi and others in today’s system are democratic versions of those earlier Chinese Communists. One shouldn’t overdraw the comparison, but there is something to be said for it. I happen to think it is one of the reasons, among many, that China stole a march on India. That gap in governance is now being closed, and will eventually, with the benefits of democracy, will far outstrip China.
Hence, whether it is identity, bank accounts, toilets, or cooking gas cylinders, the proof of the pudding lies in the eating. Modi has tapped into what people at grassroots need and want, which is not often understood by elites in Delhi. That’s why today’s anti-poverty programs are working so much better than the old ones.
Of course, what this means is that people are going to ask, “What are you going to do for an encore?” Meanwhile, elites must be prepared for an ever more determined rise by those at the bottom, with fire in the belly.
Keep chronicling India’s amazing story with all of your diligence and integrity. We all owe you a debt of gratitude.
Thank you so much for the kind words and the detailed response.
Your point about being disconnected is so well taken. I recall an interview that Narendra Modi the PM candidate had granted to Open magazine in May 2014. Remember the headline: I will break the Delhi cabal of status quoists.
Dear Anil,
Informative and interesting article! Agree with you that Jan Dhan Yojna has led to the financial inclusion revolution. The JAM trinity ( jan dhan- aadhar - mobile) has made public service delivery more efficient and transparent.
However, despite the visible progress, the growth in account activity such as ATM transactions ,short term credit, insurance, overdraft facility etc is slow . RUPAY cards were given to each account holder but according to govt data at least one in five card is dormant.Also , nearly 20% of these accounts have zero balance. We all remember these Jan dhan accounts saw , unusual cash deposits during demonetisation in 2016.
Dear Vandana,
Thank you so much.
You are right about dormant accounts. Please see this in a context--not to justify. Till 2022, 415 million were poor and did not have a bank account. Now, they have a bank account and they are not poor--but does not mean that they are rich either. This kind of transition will take many years; as the BIS study points out, this level of financial inclusion will take 5 decades to achieve. India pulled it off in 9 years!
All these measures will translate into visible change only a few years from now. Keep our fingers crossed.
Best
Anil
Dear Anil
It's truly impressive that you highlight issues which one normally takes for granted- be it electricity, drinking water or bank accounts. We have always known about bank accounts even before we knew how to operate them. It's really a great achievement in such a short span. It's a pity that it's ninth anniversary went unnoticed. Having said that, it's equally commendable that you are able to keep track of such anniversaries and achievements considering that no one else does!
It's really heartening that more than half the account holders are women. Whether a lady is an earning member or not, the onus of running a household eventually falls on her. It may not be apparent but it's surely a balancing act between earnings and expenditure. Gone are the days when women had to hide money in provision boxes or tucked away in a corner of the cupboard. Her savings for a rainy day. Now she can save money in her own account. Not only will that generate more money and more importantly no one else can misuse it without her knowledge.
The acronym JAM actually explains in a nutshell the reason for the amazing success of this ambitious scheme. The point to be noted is there have been massive savings to the exchequer despite providing so many benefits. Money saved is money earned. All in all, a win win situation.
Dear Ranjini,
Thank you so much for the kind words of appreciation. Much appreciated. So glad that these pieces resonate with you.
You are absolutely right. In the age of digital banking, anyone, including women, can use their phone to save. transact money. It is like you say a massive piece of empowerment. Which unfortunately we take for granted. All these empowerments are incrementally forcing a change in society. India is still a work in progress, but matters are visibly improving. It is the power of compounding--little incremental change then assumes exponential pace.
Thank you for reading, participating.
Looking forward to your continued participation.
Best
Anil
Some startling statistical analysis Anil, the inclusion of women and outreach to rural and semi urban areas, for opening bank accounts were for me, the standout progress. This leadership has not shied away from tackling the seemingly insurmountable tasks, plaguing India, whether it was Swachh Bharat mission, opening Jan Dhan accounts and now provision of tap water in every household. Previously the easier paths to progress were adopted by adding to the GDP by making the rich richer or modernizing the urban areas. The herculean efforts required to uplift the masses, has started now. This has been at last realized that we can only grow as a whole country. In the latter part of your article, I would like to point out that the CBDT had made E - filing of Returns compulsory from 2013 - 14, by a notification in May 2013, for persons having an assessable income exceeding Rs.5 lacs. The process today, linking Aadhar with Bank accounts has resulted in the huge increase in filing of ITR. A very enjoyable and informative podcast with a thought provoking article. Keep jogging our Grey cells Anil.
Dear Gautam,
Thank you and so glad you liked the post. And thank you for summing up the changes, especially the nudge that India's gradual transition to a rules-based regime is providing to ensure better compliance. Slowly and steadily the way we live, eat, save, play is witnessing an unprecedented reset. Hopefully, all this change will augur well for the country.
Look forward to your continued participation.
Best
Anil
Hello Anil: Apart from the always excellent summary that you have provided regarding this revolution, perhaps the most significant fact in your column for us to consider is that the anniversary went relatively unnoticed. Without sounding like some kind of revolutionary agitator, I think this reflects the gap in thinking between many of the elites and the people on the ground.
One of the big changes that has come as a result of having a PM who has emerged from the masses is that his priorities reflect the masses’ priorities. This reflects the profound democratization that has been underway over decades, dating back to when Gandhi stunned the elite-dominated Congress in the 1910’s and 1920’s by taking the freedom struggle to the masses.
In an odd way, China’s early Long March Communist leaders, including Deng Xiaoping, even though they were dictatorial, were closer to the masses than our early post-independence leaders, coming from common clay, very earthy and practical. Modi and others in today’s system are democratic versions of those earlier Chinese Communists. One shouldn’t overdraw the comparison, but there is something to be said for it. I happen to think it is one of the reasons, among many, that China stole a march on India. That gap in governance is now being closed, and will eventually, with the benefits of democracy, will far outstrip China.
Hence, whether it is identity, bank accounts, toilets, or cooking gas cylinders, the proof of the pudding lies in the eating. Modi has tapped into what people at grassroots need and want, which is not often understood by elites in Delhi. That’s why today’s anti-poverty programs are working so much better than the old ones.
Of course, what this means is that people are going to ask, “What are you going to do for an encore?” Meanwhile, elites must be prepared for an ever more determined rise by those at the bottom, with fire in the belly.
Keep chronicling India’s amazing story with all of your diligence and integrity. We all owe you a debt of gratitude.
Best regards.
Shiv
Dear Shiv,
Thank you so much for the kind words and the detailed response.
Your point about being disconnected is so well taken. I recall an interview that Narendra Modi the PM candidate had granted to Open magazine in May 2014. Remember the headline: I will break the Delhi cabal of status quoists.
Sharing the link in case you wish to read it: https://openthemagazine.com/features/india/i-will-break-the-delhi-cabal-of-status-quoists/
To his credit Modi has walked the talks as a PM. You may differ/disagree with the change, but you can't deny the end of status quo.
The era of elite capture of institutions is over. Gradually, we will see a reset with representation from sections we have never seen before.
I have no idea how things will shape up. But we can safely say status quo is dead.
Look forward to your continued participation.
Best
Anil