Context:

• Financial Inclusion is vital for empowering individuals, fostering growth, reducing poverty, and promoting social equality.
• The Indian government-backed financial inclusion drive, launched through the Pradhan Mantri Jan Dhan Yojana (PMJDY) on 28 August 2014, aimed at universal access to banking services, especially for the marginalised sections.

Genesis and Objectives of PMJDY:

• Genesis of PMJDY: When PMJDY was launched, approximately 7.5 crore households did not have bank accounts.
• Objectives of PMJDY: It aimed to provide universal access to banking services and ensure that every household, particularly the marginalised, could participate in the formal financial system.
• Focus of PMJDY: It focuses on Direct Benefit Transfer (DBT), elimination of informal credit, and promotion of savings and insurance culture.

Achievements of PMJDY:

• Bank account penetration:
  • Pre-PMJDY: Only 59% of Indian households and 35% of adults had bank accounts.
  • Post-PMJDY (2024):
    • Nearly 100% households and over 90% adults have bank accounts.
    • World Bank’s Findex report: Account ownership in India in 2024 increased to 89% with respect to individuals aged 15 years and more.
    • NSS survey 2022-23: It states that 94.65% of adults in the country own a bank account.
• Account growth:
• Over 56.2 crore accounts have been opened, a nearly four-fold increase from March 2015.
  • This includes 37.5 crore accounts in rural/semi-urban areas and 18.7 crore in urban areas.
• Women account holders: Women hold 56% of these accounts, showcasing PMJDY’s strong focus on gender inclusion.
• Total deposits: The total balance in PMJDY accounts stands at Rs 2.68 lakh crore, a 17-fold increase since 2015.
• Banking network expansion:
  • Over 16.2 lakh bank mitras (business correspondents) deliver banking services in remote areas.
  • 99.9% villages now have a banking outlet (branch, business correspondent or India Post Payments Bank) within 5 km.

Role of PMJDY in Welfare and Crisis Management:

• PMJDY accounts have streamlined DBT and ensured that subsidies and relief payments reach beneficiaries without intermediaries.
• During demonetisation and the Covid crisis, PMJDY accounts facilitated rapid financial support.

Financial Products and Digital Integration:

• The scheme has promoted digital transactions through RuPay cards. For example, over 38.7 crore RuPay cards have been issued under the scheme.
• PMJDY accounts are being used not only for receiving DBT but also facilitated -
  • For savings
  • Provided access to micro-insurance and investment products. For example, extending life and accident cover (Jan Suraksha) of Rs 2 lakh through the PMJJBY and the PMSBY.
  • Much-needed financial security (to people working in the unorganised segment) by enrolling in Jan Suraksha schemes.
• The scheme has also boosted UPI and digital transactions growth.

Future Prospects:

• Artificial intelligence and natural language processing can help in voice-based transaction authorisations, doing away with the need for smartphones or internet connectivity.
• Facilitated innovations in e-commerce with fast and reliable delivery systems in Tier 4 and Tier 5 centres.
• The government has launched a financial inclusion saturation drive, and banks are organising camps to -
  • Update KYC details,
  • Open new accounts,
  • Promote micro-insurance and pension schemes, and
  • Reduce inactive accounts under PMJDY.

Conclusion:

• PMJDY is the world’s largest financial inclusion programme, which acts as a testament to inclusive governance, and recognised as a global model for universal financial inclusion.
• As PMJDY enters its 12th year, the focus must shift from mere account creation to enhancing account activity, financial literacy, and access to diversified financial products like insurance, credit, and pensions.
• Leveraging digital innovations and deeper outreach in rural and unorganised sectors can transform PMJDY into a catalyst for inclusive and sustainable economic growth.