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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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Modi is anti-Dalit, will defeat BJP in 2019: Rahul Gandhi

Gandhi also accused the government of suppressing and intimidating the media

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Rahul Gandhi becomes president of Congress as mother Sonia Gandhi steps down
Rahul Gandhi steps in as President of Congress, Wikipedia

Congress President Rahul Gandhi on Monday accused Prime Minister Narendra Modi and his government of being anti-Dalit and said his party will defeat the BJP in 2019 Lok Sabha elections. Gandhi, who led his party’s day-long fast at Rajghat to highlight atrocities against Dalits and other communities, said party workers were protesting against an ideology, a way of thinking.

Rahul Gandhi becomes the president of Congress as mother Sonia Gandhi Steps Down
Rahul Gandhi is against Modi and his rule.

“The atmosphere that has been created in the country, it is due to the ideology of the BJP. BJP’s ideology is to divide the country, crush the Dalits, tribals, minorities. We are against the ideology of the BJP. We are standing against it today, we will stand against it throughout our lives. And we will defeat them in the 2019 elections,” Gandhi told reporters.

Asked about BJP Dalit MPs writing to Modi with their complaints, Gandhi said: “You talk to them in Parliament. They also tell us that Modiji is a casteist person, an anti-Dalit person. He has no place for Dalits in his heart, the whole country knows this. It is not a secret.”

Also Read: A voice of his own: Rahul Gandhi tries to impress Lok Sabha with his speech

Gandhi attacked BJP President Amit Shah for likening the coming together of opposition parties to “snakes, mongoose, dogs and cats” climbing a tree trunk to save themselves from floods. He said every person in the country was against the BJP.

“Some days back a BJP leader said that opposition members were animals. The truth is that today every person in the country is standing against the government. The approach that this government has against Dalits, tribals, minorities and farmers, we are standing against it,” he said. Gandhi said the country will not accept that Modi government “spreads violence, hatred in the country… We are standing here against this ideology.”

Raul Maino
Rahul Gandhi says Modi controls the Media. Twitter

Gandhi also accused the government of suppressing and intimidating the media. “You are standing on the other side but in actuality you are standing on our side as we are protecting you also. You are smiling, I know. We are fighting for you as well.” IANS