INTRODUCTION:

The general consensus among economists is that financial development acts as a promoter of overall economic growth and development. Inclusive growth becomes impossible without financial inclusion. In recent years the government and the Reserve Bank of India have been pushing the concept and idea of financial inclusion.

Financial inclusion is a process wherein all sections of society need access to appropriate financial products and services. In 2008 C. Rangarajan depicted that financial exclusion is a kind of restricting access to financial services for a particular area of the economy that includes individuals or families related to low-income groups who cannot reach basic banking such as accounts, credit, insurance, financial advisory, as well as payment services. To end the “Financial Untouchability” of previously excluded segments of society, the government of India has come up with a big bang action plan which is popularly known as “Pradhan Mantri Jan Dhan Yojna” (PMJDY). The scheme was formally launched on 28^th August 2014 across the country. The PMJDY, roughly translated as 'People's Wealth Scheme, was announced with the slogan 'Mera Khata – Bhagya Vidhata', which means 'My Bank Account – The Creator of the Good Fortune. On 20 January 2015, the scheme entered into the Guinness book of world records setting a new record for ‘The most bank accounts opened in one week’ (i.e., 23^rd to 29^th August 2014) under the Financial Inclusion Campaign by the efforts of the Department of Financial Services, Government of India. Comprehensive Financial Inclusion of the excluded sections is proposed to be achieved by 14^th August 2018 in two phases. Phase I (15^th Aug 2014 – 14^th Aug 2015) has completed, and Phase II (15 Aug. 2015 to 14 Aug 2018) has been pursued.

PMJDY appears to be built on simplistic norms with blanket utilisation. Its appeal is uncomplicated access to financial services (like Banking, Savings and Deposit Accounts, Remittance, Credit, Insurance, and Pension) for anyone, rural or urban, who wishes to access them. Some distinctive provisions include no minimum balance requirement for bank accounts, an accident insurance cover of Rs.1 lakh ($1,500), grievance redressal mechanisms, and active State/District-level monitoring. These mechanisms make it easy for anyone to open a bank account and engage in financial services. The plan envisages channelising all Government benefits (from Centre / State / Local Body) to the beneficiaries accounts and pushing the Direct Benefits Transfer (DBT) scheme of the Union Government.

REVIEW OF LITERATURE:

Diveyesh Kumar (2014) discussed the overview of financial inclusion using PMJDY in India. It is revealed that it is one of the greatest steps ever taken to eradicate poverty by means of financial inclusion through PMJDY. It is suggested that the success of this scheme needs constant review and regular checks, which are very much essential. Dr Rajan Raghuram (2014) “Five Ps of Financial Inclusion (Product, Place, Price, Protection, and Profit)” entitled that Simplicity and reliability are keys to what one thinks one is paying for what one should get, without hidden clauses or opt-outs to trip one up. Transaction costs should be low in nature and feasibility of accessing the banking services.

Dr. Rai, (2015) attempted to analyze PMJDY scheme. She suggested that facilities on PMJDY have a positive impact on poor and vulnerable sections of society. The Positive shift from quantity of inclusion to quality of inclusion could be achieved only when certain impediments are addressed, like poor Banking infrastructure and effective monitoring and implementation. Kunthia R (2014), the author, studied the recent developments in Financial Inclusion in India with special reference to the recently launched PMJDY. The author has presented an analysis of its different important areas and the roadblocks in the process and has suggested strategies to attain universal coverage of the PMJDY for the underprivileged population and the large unbanked areas of the country.

The World Bank paper titled, ‘Making it Easier to Apply for a bank Account: A Study of the Indian Market’ (2017) by Asli Demirguc – Kunt, Leora Klapper, Saniya Ansar and Aditya Jagati has noted a 10% gender gap in opening accounts under the country’s flagship programme – Jan Dhan Yojana- with 73% men applying for the account against 63% women. Madhya Pradesh recorded the largest gender gap of 21%. The author also noted an income gap – 64% being poorer adults and 71% being richer adults – in applying for accounts. The survey was carried out between January and March of 2016 in 12 States. The research said that despite initial successes, people who have applied for an account continued to incur a range of costs, including the cost of travelling to bank branches, the cost of collecting documentation and various other monetary charges. The confluence of these factors makes account opening a tedious task.

OBJECTIVE(S):

1. To analyse the current status and progress of the PMJDY scheme.

2. To analyse the impact of PMJDY on Financial Inclusion.

3. To study the Challenges of PMJDY and make some suggestions for the smooth functioning of the scheme.

METHODOLOGY:

The present study is descriptive in nature, and this work will primarily be done with secondary data sources. The information and data for the paper have been collected from the economic survey of India, the Reserve Bank of India PMJDY Brochure, government publications, published articles, journals, newspapers, reports, books, and official websites of Pradhan Mantri Jan Dhan Yojana (PMJDY). However, the result of the study is subjected to the constraints imposed by the non-availability of data.

Initiatives in financial inclusion:

Financial inclusion has always been a priority in the Indian Government since 1969 when banks were nationalised to transform “class banking” into “mass banking”. In 2005, in the Annual Policy Statement, the term ‘financial inclusion was first used in the Indian context by the Governor of the RBI, Y.Venugopal Reddy.

Despite various measures for financial inclusion, poverty and exclusion continue to dominate socio-economic and political discourse in India after two decades of post-economic liberalisation. 100%financial inclusion is still a dream project. According to the World Bank Survey 2012, only 35% of Indian adults had access to a formal bank account; in developing countries worldwide, the average is 41%. Census 2011 estimated that out of 24.67 crore households in the country, 14.48 crore (58.7%) families had access to banking services (source PMJDY Brochure). In 2011, the Government of India pushed the programme seriously by undertaking the "Swabhimaan" campaign to cover over 74,000 villages, with a population of more than 2,000 (as per the 2001 census), with banking facilities. State-wise number of villages covered under the campaign.

Table 1: Position of households availing banking services

As per Census 2001				As per Census 2011
Households	Total number of households	Number of households availing banking services	Percent	Number of households availing banking services	Number	Percent
Rural	138,271,559	41,639,949	30.1	167,826,730	91,369,805	54.4
Urban	53,692,376	26,590,693	49.5	78,865,937	53,444,983	67.8
Total	191,963,935	68,230,642	35.5	246,692,667	144,814,788	58.7

Source: Department of Financial Services, Ministry of Finance

Chart 1: Availability of Banking Services

PMJDY, launched on 28^th August 2014, shows the nation’s ray of hope. This is an important step towards converting the Indian economy into a cashless and digital economy. Over time, the PMJDY, an ambitious agenda of financial inclusion, has completed approximately three and half years and two and a half years of its Phase II approximately. So, it is time to examine the progress and prospect of PMJDY and its impact on financial inclusion. The study attempted to shed light on these things.

Progress of Pradhan Mantri Jan Dhan Yojana:

The growth of bank accounts is a key parameter for assessing growth in financial inclusion. PMJDY was implemented by banks successfully on the inauguration day; 1.5 Crore (15 million) of bank accounts were opened.

Phase 1 Data:

Table 2: No of Accounts opened under PMJDY as of 31.01.2015 (Summary)

Banks	Rural	Urban	No of Accounts	No of Rupay Debit Card	Balance In Accounts (in Lacs)
Public Sector Bank	53300249	45147276	98447525	91232024	817463.04
Regional Rural Bank	18489448	3297833	21787281	14967614	159948.08
Private Bank	3226397	2012086	5238483	4593161	72551.50
Grand Total	75016094	50457195	125473289	110792799	1049962.62

Source: Official website of PMJDY

Table 2 shows the number of accounts opened under PMJDY as of January 2015 in rural and urban areas. The number of RuPay debit cards issued and balance in accounts. It is found that 12.55 crore accounts were opened under the scheme, amongst public sector banks had opened 9.84 crore accounts, Regional rural banks had opened 2.17 crore accounts, and private sector banks had opened 0.53 crore accounts as of 31-01-2015. It also revealed that banks issued a total of 1.07 crores RuPay debit cards under PMJDY.

Table 3: Pradhan Mantri Jan Dhan Yojana Accounts Opened as of 27-01-2016 (All figures in crores)

Bank Group	Rural	Urban	Total	No of RuPay Cards	Aadhaar Seeded	Balance in Accounts	% of Zero Balance Accounts
Public Sector Banks	8.95	7.13	16.08	13.86	7.49	24277.31	31.72
Regional Rural Banks	3.12	0.52	3.64	2.64	1.05	5368.18	25.96
Private Sector Banks	0.45	0.30	0.74	0.70	0.24	1160.97	39.73
Total	12.53	7.94	20.47	17.20	8.79	30796.46	30.99

Source: Official website of PMJDY

Table 3 shows the total number of savings bank accounts opened in rural and urban areas under the PMJDY scheme. Several RuPay debit cards were issued with balances in accounts. Several accounts opened with zero balance and Aadhaar seeding under the PMJDY scheme in public sector banks, Regional rural banks and private sector banks. It is found that 20.47 crore accounts were opened under the scheme, amongst public sector banks had opened 16.08 accounts, Regional rural banks had opened 3.64 crore accounts, and private sector banks had opened 0.74 crore accounts as of 27-01-2016. It also revealed that banks issued a total of 17.20 crores RuPay debit cards under PMJDY as of 27-01-2016. Out of 17.20 crores, 13.86 crores RuPay debit cards were issued by public sector banks, 2.64 crores RuPay debit cards were issued by regional rural banks, and 0.24 crores RuPay debit cards were issued by private sector banks.

Table 4: Pradhan Mantri Jan Dhan Yojana Beneficiaries as of 03-01-2018(All figures in crores)

Bank Name/Type	Number of Beneficiaries at rural/semi-urban centre bank branches	Number of Beneficiaries at urban metro centre bank branches	No of Rural-Urban Female Beneficiaries	Number of Total Beneficiaries	Deposits in accounts (In crores)	Number of Rupay Debit cards issued to beneficiaries
Public Sector Banks	14.68	12.49	14.30	27.17	69908.66	22.20
Regional Rural banks	4.71	0.88	3.09	5.59	15210.46	3.70
Private sector Banks	0.62	0.43	0.56	1.06	2432.14	0.98
Grand Total	20.01	13.81	17.94	33.82	87551.26	26.88

Table 4 shows the total number of savings bank accounts opened in rural and urban areas, number of RuPay debit cards issued and the balance in accounts under the PMJDY scheme as of 03^rd Jan.2018. The table clearly shows that 33.82 crore accounts were opened under the scheme; amongst public sector banks opened, 27.17 crore accounts, Regional rural banks opened 5.59 crore accounts. Private sector banks opened 0.62 crore accounts. It also revealed that banks issued total of 26.88 crores RuPay debit cards under PMJDY as on 03/01/2018

Table 5: Pradhan Mantri Jan Dhan Yojana Beneficiaries as of October 2022

Bank Name/Type	Number of Beneficiaries				Deposits in Account	Number of RuPay Cards
Bank Name/Type	Rural/ Semi-urban Branches	Urban Bank Branches	Rural/ Urban Female Beneficiaries	Total	Deposits in Account	Number of RuPay Cards
Public Sector Bank	23.32	13.94	20.52	37.26	137929.95	27.76
Regional Rural Bank	7.51	1.19	5.02	8.71	35003.95	3.42
Private bank	0.70	0.61	0.72	1.31	5049.83	1.11
Total	31.54	15.74	26.25	47.28	177983.73	32.28

Effective financial inclusion should be reflected not only in access but also in financial services. In terms of deposits, the average balance in accounts opened under PMJDY has registered steady growth from $1,065 per account in March 2015 to $2,236 in March 2017. Also, zero balance accounts under PMJDY have declined consistently from nearly 67.5 per cent on 28 January 2015, 58 per cent in March 2015, to around 24 per cent as of December 2016(Figure1). The number of rural accounts opened under PMJDY has grown from 8.0 crore in August 2015 to 14.8 crore in August 2016 and 17.2 crores in May 2017. Use of accounts in terms of deposits and transactions has registered impressive growth. Besides the personal accident insurance cover to the holders of accounts opened under PMJDY through the insurance in-built into their associated debit cards, 10.02 crore account holders have insured themselves for personal accident cover under Pradhan Mantri Suraksha Bima Yojana and 3.11 crore for life insurance cover under Pradhan Mantri Jeevan Jyoti Bima Yojana. As a result, the number of persons insured for personal accidents and life has increased from about 32.31 crores in March 2015 to about 45.44 crores in May 2017. This has been achieved while substantially lowering the premium amount to make it affordable to large sections of the population. 3.16 Among several strategic choices and innovations that have enabled these outcomes, three main enabling factors are noteworthy. (The second volume of the 2016-17 Economic Survey)

Figure 2: Trend of Zero Balance Accounts

Source: Official website of PMJDY

PROBLEMS:

In PMJDY account is opened with zero balance which will attract the masses to connect with the bank, and it will also reduce the dependency of the marginalised section on the informal source of credit. According to the experts, offers like zero balance, free insurance and overdraft facility would result in duplication. Many individuals who already have bank accounts may have had accounts created for themselves, lured by the insurance covers and overdraft facilities. Till now, 30.84 crore accounts have been opened. It will result in a massive increase in the burden on banking officials. Lack of adequate technology base Indian banking system is not capable of handling heavy traffic of banking transactions. Most rural and illiterate people do not have to access PMJDY accounts properly because of a lack of financial literacy and baking awareness. In the Demonetisation era, we clearly saw that most of the PMJDY accounts increased unexpected deposits. It is the misuse of the PMJDY accounts. Some banking experts also state that one of the main features of PMJDY bank account is the availability of an overdraft facility of Rs.5000. This will lead to unnecessary use of funds by the account holders and increase the NPAs of banks. As per the scheme, very few people are eligible to get life insurance worth 30,000 (US$470) with a validity of just five years. These are some challenges and issues related to the PMJDY scheme.

CONCLUSION:

PMJDY plays a massive role in developing banking habits. The overall increase in account ownership in the last few years, particularly for women and poor adults, is an important step in the right direction. The scheme has achieved great success by opening 30.84 crores of bank accounts, focusing on rural areas where the total accounts opened stood at 18.15 crore. The RuPay debit cards issued to those account holders also stood at 23.27 crore with a balance of 72266.94 crores in these accounts, which shows the success not only on the side of opening accounts but also saving in these accounts. We can conclude from the data analysis that out of the total account opening progress northeast zone, people have a very small number of bank accounts under PMJDY. So, more emphasis needs to be given to the hilly areas and places which infrastructure and connectivity constraints so that people in those areas can also be benefitted financially as well as socially from this scheme and they would be able to achieve the target of inclusive growth. So, in a nutshell, we can say PMJDY is a better and more effective tool for financial inclusion than earlier plans and schemes for social inclusion.

SUGGESTION:

Some issues mentioned above are not permanent; an effective system and good power of Govt., the banking system officials and people can quickly solve these problems and make the PMJDY scheme more effective and attractive in the path of Financial Inclusion and overall development of our country. PMJDY has many potentials if well implemented and monitored to address the challenges. The success of the PMJDY scheme depends on the effective regulatory system as the stakeholders have to build a sustainable ecosystem to keep the accounts active, evaluate the program's successful implementation, and combine the present program with related schemes to expand its scope and functionality. People should be aware of the government's various schemes and programs for them. If possible, banks should launch a mass campaign to open bank accounts and financial literacy programmes so that a maximum number of people benefit. PMJDY is a ray of hope in achieving the financial inclusion target. The philosophy of SAB KA SAATH SAB KA VIKAS not only promotes the role of rural India in the growth process but also acknowledges the commitment, cooperation, dedication, and continuity provided by all the constituents and stakeholders of the society.

REFERENCES:

1. Rangarajan Committee (2008), Report of the committee on Financial Inclusion, Government of India

2. Mohan Brij (2014) “Pradhan Mantri Jan Dhan Yojana (PMJDY): Feature, Needs, and Challenges”; International Journal of Marketing, Financial Services and Management Research, Vol. 3 (12), December; PP. 111-117, ISSN: 2277-3622

3. Chowhan Sudhinder Singh and Pande D.C. (2014) “Pradhan Mantri Jan Dhan Yojana: A Giant Leap towards Financial Inclusion” International Journal of Research in Management and Business Studies, Vol.1 Issue-4, Oct-Dec, ISSN- 2348-6503

4. Dr. Rajan Raghuram (2014) “Finance and Opportunities” Speech, Reserve Bank of India, Aug11

5. Rai Shanti (2015), “Pradhan Mantri Jan Dhan Yojana: An Ambitious Plan for Financial Inclusion”; Research Front, Vol-3, No.2, Apr.-Jan. ISSN: 2320-8341

6. Demirguc- Kunt Asli, Klapper Leora, Ansar Saniya and Jagati Aditya (2017), “Marketing It Easier to Apply for a Bank Account: A Study of the Indian Market”; Policy Research Working Paper, World Bank Development Research Group, WPS8205

7. Anupam Sharma and Ms Sushmita Kukereja (2013) “An Analytical study: Relevance of Financial Inclusion for Developing nations”, International Journal of Engineering and Science, PP15-20.

8. Aiyar, Swaminathan S. Anklesaria (2014). “Mr MODI GETS CONGRESSISED, Economic Times, 3 September.

9. Government of India (2014). “Pradhan Mantri Jan Dhan Yojana - A National Mission on Financial Inclusion”. Department of Financial Services, Ministry of Finance, New Delhi.

10. Economic Survey 2014- 15 and 2016- 17

Received on 10.11.2022 Modified on 05.12.2022

Res. J. Humanities and Social Sciences. 2022; 13(4):247-252.

DOI: 10.52711/2321-5828.2022.00038