Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to
ensure access to financial services, namely, Banking/ Savings & Deposit Accounts,
Remittance, Credit, Insurance, Pension in an affordable manner. It will complete its eight year
of implementation in August 2022.
Sociological analysis:
Dipa Sinha and Rohit Azad write that while there has been a tremendous increase in
the number of bank accounts opened, the data show that the average balance in these
accounts is low and a significant proportion of the accounts are inoperative.
They believe that very few people have benefited from the overdraft facility that is
supposed to be provided by the accounts under the scheme. Issues of access to banking
in rural areas remain.
A Santhosh Mathew writes that the current focus on financial inclusion has opened up
solutions to reduce leakages in central and state government schemes. For these
solutions to have a sustainable impact, deeper issues in public fund management must
be addressed, which revolve around three key challenges:
"first-mile" problems of transferring central and state funds to local
implementation agencies in a timely, efficient and transparent manner;
"last-mile" problems of sending benefits to beneficiary or vendor bank
accounts without delays; and
"beyond-the-last-mile" challenges of ensuring rural beneficiaries have
adequate access to remote banking services.
Shailla Draboo writes that on the question of financial inclusion of the marginalized
sections, Digital India has turned out to be an important intervention. However,
according to JN Niranjan, the most common barriers to the digital financial inclusion
include the non-availability of suitable financial products, lack of skills among the
stakeholders to use digital services, infrastructural issues, teething problems between
various systems, and low-income consumers who are not able to afford the technology
required to access digital services.
Shailla Draboo believes that another challenge to digital financial inclusion arises
from the attitude of the stakeholders. For instance, in the case of Jan Dhan bank
accounts, the opening of many dormant accounts which never saw actual banking
transactions, incurred costs on the institutions, and thus, huge operative costs only
proved to be detrimental to the actual objective, Hence all stakeholders need to bear
responsibility for allowing the scheme to succeed.
Another major bottleneck faced by Digital India, with respect to financial inclusion, is
the heavily dominated cash economy in the country. The data from RBI reveals that
cash circulation has increased in 2018 after demonetization. As per a report of the
International Labour Organization (ILO), about 81% of the employed persons in
India work in the informal sector (ILO 2018). The combination of a huge informal
sector along with a high dependence on cash mode of transaction poses an impediment
to digital financial inclusion.
There is also a gender dimension to financial inclusion in the country. According to
the 2017 Global Findex database, 83% of males above 15 years of age in India held
accounts at a financial institution in 2017 compared to 77% females (World Bank
2018). This is attributed to socio-economic factors, including the availability of mobile
handset and internet data facility being higher among men than women.
In conclusion, for the success of digital initiatives, there has to be a multidimensional
approach through which existing digital platforms, infrastructure, human
resources, and policy frameworks are strengthened. More importantly, human
resources should be leveraged by skilling and positively engaging with them to achieve
the last-mile connectivity of financial institutions.
