World bank endorses the initiative taken up by the government by saying that India’s strong government push to increase account ownership through biometric identification cards helped narrow both the gender gap and the gap between the rich and poor.
India has considerably reduced the gender gap in providing access to financial services with 77% women against 83% men having bank accounts, the World Bank said in its Global Findex database 2017 released on Thursday, whereas globally, 65% women have an account compared with 72% men, a gap of 7 percentage points that remains unchanged since 2011.
According to reports, “In India three years ago, men were 20 percentage points more likely than women to have an account. Today, India’s gender gap has shrunk to 6 percentage points thanks to a strong government push to increase account ownership through biometric identification cards.” According to government data, the total number of current and savings accounts in banks has risen from 122.3 crores in March 2015 to 157.1 crore in March 2017.
Partly the contribution might be India’s Jan-Dhan Yojana scheme, developed by the government to increase account ownership, brought an additional 310 million Indians into the formal banking system by March 2018. In India, the share of adults with an account has more than doubled since 2011, to 80 percent, the World Bank said, adding that an important factor driving this increase was a government policy launched in 2014 to boost account ownership among unbanked adults through biometric identification cards.
Between 2014 and 2017, account ownership in India rose by more than 30 percentage points among women as well as among adults in the poorest 40 percent of households. Among men and among adults in the wealthiest 60 percent of households it increased by about 20 percentage points.
It is said that the governments move of switching from cash to digital payments can reduce corruption and improve efficiency. In India, the leakage of funds for pension payments dropped by 47 percent (2.8 percentage points) when the payments were made through biometric smart cards rather than being handed out in cash.
Hailing India’s Aadhaar digital ID, the World Bank has said the initiative is estimated to be saving the government about $1 billion annually(₹650 crore) a year by reducing corruption and leakage for the Indian government. It is a help in fiscal budgeting. It is a help in providing other useful services,” World Bank Chief Economist Kaushik Basu told reporters here during the release of a report on Digital Dividends.
An official from World Bank headquarters said that “India’s Aadhaar digital identification system has already reached close to one billion people enabling many of the poor to access services more easily and making it possible for the government to deliver welfare services more easily.” It further emphasised that India is on track to register its entire 1.25 billion population using its Aadhaar digital ID.
Amongst a lot of denunciations and condemnations from the opposition, this boost from the World Bank definitely gives the government reasons to celebrate its achievements and accomplishments.