NDTV journalist Sreenivasan Jain dissects Jan Dhan Yojana using Half-Empty understanding

Pradhan Mantri Jan Dhan Yojana, launched by Narendra Modi on 28 August 2014, was under multiple radars since the day it was announced. The vision, as stated by Modi, was to end “financial untouchability” and to ensure that the majority of households in this country has a bank account within months. As mentioned on the official website:

Objective of “Pradhan Mantri Jan-Dhan Yojana (PMJDY)” is ensuring access to various financial services like availability of basic savings bank account, access to need based credit, remittances facility, insurance and pension to the excluded sections i.e. weaker sections & low income groups. This deep penetration at affordable cost is possible only with effective use of technology.

The ambitious plan aimed to include crores of those Indians who don’t have a bank account has already faced numerous appreciations and criticism – rational, funny, absurd and weird ones.

Sreenivasan Jain (journalist, NDTV) wrote a hilarious piece headlined, “Truth vs Hype: Jan Dhan’s Half-Empty Promise“. Not surprisingly, when he was questioned about his narratives, he started putting orthogonal arguments about Haryana, Reserve Bank old stats, etc. His article which generalizes a national policy by applying some sampling method like “Akkad Bakkad Bambe Bo” weaves around rumors and myths. Yes, the journalist from a national TV created a story based on ‘potent’ rumors (as he writes) like, “We were told each of us would get Rs. 5,000 in our accounts from black money seized from abroad”

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Before scrolling down his article, let us read the Pradhan Mantri Jan Dhan Yojana scheme from the official website:

Special Benefits under PMJDY Scheme

  1. Interest on deposit.
  2. Accidental insurance cover of Rs.1.00 lac
  3. No minimum balance required.
  4. Life insurance cover of Rs.30,000/-
  5. Easy Transfer of money across India
  6. Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
  7. After satisfactory operation of the account for 6 months, an overdraft facility will be permitted
  8. Access to Pension, insurance products.
  9. Accidental Insurance Cover, RuPay Debit Card must be used at least once in 45 days.
  10. Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the household.

Did anyone read Rs. 5,000 in accounts immediately after opening the account? Well, Mr. Jain did. Not only that, Mr. Jain also extended his imaginations and linked this to Black Money. Mr. Jain claims that On the Jan Dhan Yojana website, nearly 70 per cent of accounts opened under the scheme are shown as dormant, and by peacefully neglecting the Clause 7 explicitly mentioned in scheme, quotes that Six months later, the accounts in Nizampur are empty; not a single rupee of government benefits has come. He places both his narratives one below other. Sreenivasan Jain either hates to read legal clauses or he is deeply in love with paradoxes.

When officials in the Department of Financial Services apprised NDTV Team about improvements in dormant accounts, Mr. Jain, who fathomed the Jan Dhan Yojna based on rumors in Alwar and a local bank in Nizampur village, shifted his argument to operational competency of banking systems. Later, he quotes:

Data from the Reserve Bank of India shows that the spread of rural banks has fallen by seven per cent between 2006 in 2013.

We must appreciate Sreenivasan Jain for predicting the fate of a program launched in 2014 based on data between 2006 and 2013. If he can apply Time Series Forecasting to predict complex and changing socio-economic conditions, just using a one-dimensional variable, he must be seen as a role model by mathematicians and economists around the universe.

As per reports, of the new account holders, 41 per cent have deposited more than Rs 14,000 crore. Mr. Jain interviews a former MD of State Bank Of India who says that it is not feasible for banks to profitably run the scheme because the average balance is only Rs. 400  per account which can only give a revenue of Rs. 12 per account to banks, but he fails to recognize that this is the pre-subsidy balance. Jan Dhan Yojna is only the First step of an ambitious project, but like other journalists of NDTV, Sreenivasan Jain has concluded its fate in the initial phase.

It is noteworthy that Sreenivasan Jain expects subsidy money to come into accounts within few months when all due diligence is needed to be done and all accounts are needed to be verified. If money was given in a few months, Mr. Jain would have slammed the government saying that facilities and subsidies are distributed without verifications. The article completely loses its essence when Sreenivasan Jain supports retrospective methods like post office or cash directly, but fails to mention massive corruption and leakages prevalent in these systems (which is precisely why the government went to direct cash transfers)

With the deep-rooted corruption and inefficiencies in our system, Jan Dhan Yojna will certainly face many challenges. While Sreenivasan Jain deliberately declares Jan Dhan as a Half-Empty Promise, he fails to appreciate a massive scheme which can reduce corruption and uplift the many downtrodden people. Indian Banking system may not be currently equipped enough to provide proper financial platforms to all the people, but do we want the conditions to remain the same?

Mr. Jain would certainly love India to be stuck as an obsolete society when countries like US, Russia, Spain and the Netherlands are keen to adopt Jan Dhan Yojna type schemes.

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