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Narendra Modi’s Financial dream,progress Slows down

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By Himadri Ghosh

“Never before in economic history would 15 million bank accounts have been opened on a single day. Never before has the Government of organized a program of such scale,” Prime Minister Modi said on August 28, 2014, launching the Pradhan Mantri Jan Dhan Yojana (Prime Minister’s People’s Wealth Programme/PMJDY).Seventeen months later, in January 2016, the scheme reached all Indian households, according to official data, bringing 200 million additional families to the banking system.

But the primary goal, direct transfer of government subsidies to people, has not overcome two challenges: linking the unique identification (Aadhaar) card to PMJDY; and getting beneficiaries to use the bank account. The speed of adding accounts, as IndiaSpend reported earlier, was outpacing the delivery of benefits, and Reserve (RBI) governor Raghuram Rajan, in 2014, cautioned banks against focussing on numbers alone.

Less than half the 210 million Jan Dhan accounts were seeded with Aadhaar as of January 31, 2016, the data indicates. More than 30 percent of these accounts have been at “zero balance”, meaning the account holder was not using the account.

States struggling to link Aadhaar to PMJDY include Andhra Pradesh, Chhattisgarh, Jharkhand Karnataka, Kerala and Maharashtra. These states together linked less than 40 percent accounts to Aadhaar.

It is important that these states fall in line, as subsidies on cooking fuel, auto fuel and food grain impose a multibillion-rupee subsidy burden, the government has said.

The government is estimated to have spent Rs.266,700 crore ($45 billion) on subsidies in 2015, of which Rs.122,700 crore ($20 billion) was spent on food, Rs.71,000 crore ($12 billion) on fertilizer and Rs.60,300 crore ($9 billion) on oil.

Up to half of these subsidies are misappropriated, according to various estimates.

“One of the biggest reforms that India has embarked upon is moving to a market-pricing mechanism across a variety of products such as cooking fuels, auto fuels, food grains and fertilizers,” a Kotak strategy report said.

‘A policy does not work by itself?people must know how to use it’

“It takes time to properly implement policies in India, more so for financial schemes like PMJDY as a lot of people are unaware of words like bank, loan, subsidy,” said Santosh Kumar, professor of public policy and administration at FLAME University, Pune.

The integration of PMJDY, Aadhaar and Mobile (JAM) could be an important component of structural reforms. The idea of JAM, as propounded in the 2015 Economic Survey and the union budget, was to identify the beneficiary and deposit subsidies directly into his/her bank account.

“A policy does not work by itself,” said Kumar. “The government must have a strong political will to implement the policy properly by scrubbing it of discrepancies.”

“There are two aspects to financial inclusion: one is bank accounts and the second is access to credit. The scheme announced by the prime minister addresses the first problem. The issue of making credit available to small borrowers remains,” wrote C. Rangarajan, former chairman of the Economic Advisory Council to the prime minister, in The Hindu.

An article published by RBI in May 2013 revealed that more than 42 percent of rural credit is sourced from non-institutional agencies. “Rural credit markets in India is characterized by the coexistence of both formal and informal sources of finance and the market is fragmented,” RBI concluded after four rounds of survey.

“The scheme is a step forward but a lot needs to be done before calling it successful,” said Anindita Roy Saha, associate professor of economics at Delhi University. “People from rural and urban areas need to be treated separately. For achieving the objectives, people should be educated about the financial system.”

The United Progressive Alliance (UPA) government had opened nearly 60 million so-called no-frills accounts, but RBI data have shown that more than half of them remained dormant.

“The basic idea of financial inclusion is to include most of the vulnerable sections of society in the banking system,” said Kumar. “People need to know the potential of the scheme and the documents they have in possession; otherwise, they can’t exercise their rights.” (IANS/indiaspend.org)

 

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Congress To Use Tribal Card to Regain Power in the Country

Congress to use tribal card to improve countrywide position

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Congress Chhattisgarh
Congress will be using the tribal card to regain dominance and their plan of action will begin from Chhattisgarh. Wikimedia Commons

BY SANDEEP PAURANIK

In order to regain dominance in the country, the Congress is mulling using the tribal card. This plan of action is to be first implemented in Chhattisgarh.

Riding on the success of the Assembly and urban body elections, the Congress feels that it can increase it base through tribals as they constitute 8 per cent of the total population.

The Bharatiya Janata Party (BJP) in the first three Assembly elections in the state, after its formation in 2000, recorded huge victories and came to power. But after the Assembly elections held last year, the scenario changed. After registering a victory in the Assembly elections and then in the urban body polls, the Congress showed that it still dominates the tribal areas.

Rahul Gandhi Congress
Former President of Congress Rahul Gandhi gave an important message while innaugrating the National Tribal Dance Festival in Raipur. Wikimedia Commons

The Congress gave the responsibility of the tribal areas to the tribal leader of Madhya Pradesh Umang Singhar which eventually helped the party. Now, the party is planning to spread out nationwide through Chhattisgarh.

Former party president Rahul Gandhi, while inaugurating the National Tribal Dance Festival in Raipur, gave a message to the tribals who are here to participate in the festival that the Chhattisgarh government is working for all the sections and this is the reason why there has been a downward trend in naxal attacks and the state economy has also improved.

The Congress is planning to publicise the improvements in Chhattisgarh throughout the country because the tribal population in the state is 32 per cent.

BJP media panellist Sandeep Sharma, however, claims that the party’s base has not shrunk. He said till Madhya Pradesh and Chhattisgarh were not divided, the Congress was strong in the area but in the elections held after three years of the bifurcation, the BJP won the Assembly elections and was in power for 15 years. Though we faced defeat in the 2018 elections, the only reason was that people wanted a change but they were not angry with the BJP, he claimed.

The BJP won in the Lok Sabha elections and the margin in the urban body elections was also not much. So, it would be inappropriate to say that the BJP’s base has shrunk, he said adding that in one year the Congress’ base has declined by 9 per cent whereas in Assembly elections it got 12 per cent more votes and in urban body elections the margin was 3 per cent.

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The Congress is planning to publicise the improvements in Chhattisgarh throughout the country. Wikimedia Commons

Analysing the political landscape of the state, political analyst Rudra Awasthi said, “When it was Madhya Pradesh then the Congress had stronghold in Chhattisgarh. Several big leaders were also from the state but after the formation of Chhattisgarh since Ajit Jogi was accused of being a fake tribal the Congress lost its stronghold over the tribals. Though it continued to dominate in some of the areas which helped it in regaining the power.

“As of now, the Congress has started including the tribals with the backward class. First Bhupesh Baghel was the state chief of the party and he was replaced by Mohan Markam as he became the Chief Minister. During the Assembly elections, the Congress talked about the identity of the tribals which helped the party. After winning the elections, the decisions of the Congress government were in favour of the tribals which helped the party in the urban body elections,” said Awasthi.

Also Read- Unity in Diversity is the Strength of the Country: Rahul Gandhi

The Congress is mulling over spreading its message to the tribals across the country through the three-day festival going on here. For this several senior leaders of the party will attend the festival and share the government’s schemes while giving the message that the Congress government in the state has brought a positive and a significant change in the lives of the tribals. (IANS)