Study on effectiveness of Jan Dhan yojna

Abstract

Pradhan Mantri Jan Dhan Yojna rolled out on 28th August 2014 is the flagship scheme of the Indian government to promote financial inclusion. Till now 27.55 crore accounts have been opened this scheme. 24% of these accounts are zero balance representing a sharp decline from 75% of zero balance accounts in 2014. There is a positive correlation between zero balance accounts in a state and poverty status of the respective state. The average balance has increased over the last 2.5 years, and there is a sharp increase in balance in accounts opened by BCs. Average balance is also inversely proportional to poverty level of the status. Demonetization has had a positive impact on average balance and negative impact on zero balance accounts. There is also a high regional disparity in persons per bank, BC density and people per BC. North eastern states, in particular, have fared poorly on these parameters. Aadhar seeding has also been low in North-eastern parts mainly due to connectivity and immigrant issues. Thus the Jan Dhan Scheme should now focus on improving usability, accessibility, financial literacy and reducing disparity.