The Jan Dhan accounts are made with an intention to spur the financial inclusion by making banking system and facilities available to poor people. The rural population in India are still not part of the banking sector is a bad sign and this issue is solved by Jan Dhan accounts. The net deposits have exceeded the pre-lock down level by a good margin week after week and this can be considered as a good sign towards revival. Those accumulated funds are transferred for the immediate relief by the government.
The hike in net deposits can be due to two reasons like discretionary spending has been affected which lead to decreased withdrawal from banks and second reason can be the harvest of the rabi crops from April which boosted the income of farmers. These two factors have contributed to the rise. As of August 5, there was a total balance of Rs 1,29,720 crore in 40.21 crore Jan Dhan accounts which are higher than that of Rs 1,18,106 crore on March 25. The net deposits are exceeding but at a slow pace since June 10, by when the transfer of preceding instalment of government was almost over.
Our Finance Minister Nirmala Sitharaman, as part of coping up with COVID-19 impact, a relief package was announced with a transfer of Rs 500 crore a month to 20.4 crore women Jan Dhan account holders for 3 months starting from April 2020. Banks have also opened 1.9 crores more accounts since the lockdown. Financial inclusion is a very important factor in the revival and growth of an economy. Chief Economic advisor Krishnamurthy V Subramanian in early May stated that the business, entrepreneurs and workers will face serious challenges due to pandemic but a large-scale distress notion is disapproved. The rural distress is not to that extent just like how some people or analysts on some quarters showcase it. Millions of accounts were been added every month since our honourable Prime Minister Narendra Modi announced the scheme in August 2014 and there was a phenomenal speed. The pace was slow when it started but gradually increased by late 2015 where most of the beneficiaries were covered. The major target of government was to make every household open a single account which was achieved as early as January 26 of 2015. Some areas like Jammu and Kashmir and Naxalism- affected districts are exemption in this case.
