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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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BJP Hopeful of Getting its “First Chief Minister” in Jammu and Kashmir

Meanwhile, the BJP which shared power in the state with the PDP for three years from 2015 to 2018, did not get the top post

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BJP, Chief Minister, Jammu and Kashmir
Jammu and Kashmir has seen several Chief Ministers from Congress, National Conference and the People's Democratic Party (PDP). Flickr

The BJP is hopeful of getting its “first Chief Minister” in Jammu and Kashmir following the abrogation of Article 370 from the state two months ago, and the planned delimitation of the Assembly constituencies.

In an interview to IANS, Jammu and Kashmir Bharatiya Janata Party (BJP) chief Ravinder Raina said, “Jammu and Kashmir is a unit. And as President of BJP here, I am confident that we will have a BJP Chief Minister in Jammu and Kashmir very soon.”

Jammu and Kashmir has seen several Chief Ministers from Congress, National Conference and the People’s Democratic Party (PDP).

Meanwhile, the BJP which shared power in the state with the PDP for three years from 2015 to 2018, did not get the top post and had to accept the post of Deputy Chief Minister.

BJP, Chief Minister, Jammu and Kashmir
In an interview to IANS, Jammu and Kashmir Bharatiya Janata Party (BJP) chief Ravinder Raina said, Jammu and Kashmir is a unit. Flickr

When asked about the planned delimitation of constituencies in Jammu and Kashmir, Raina said, “The Election Commission will take a final call on the delimitation of the Assembly constituencies here.”

Raina said the poll panel will constitute a commission, which will be headed by either a retired Supreme Court or High Court judge.

The BJP leader pointed out that the commission which will be constituted for the delimitation process will follow all the standard prodecures.

The government abrogated Article 370 of the Constitution from Jammu and Kashmir on August 5 and also bifurcated the state into two union territories.

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Following the revocation of Article 370, the government has enforced a massive clampdown on communication and internet services in the state and deployed heavy security presence.

To a question over the clampdown for 60 days in the state, the state BJP chief said, “Soon after the abrogation of Article 370 the mobile connectivity and internet facility was suspended here.

“And now you are witnessing that the mobile connectivity and Wi-fi services are given a free hand and people are using those facilities here,” Raina said pointing towards the Wi-fi hotspots and connections provided to the citizens in Jammu.

Pointing towards the Kashmir valley, where only landlines connections and BSNL mobile networks are operating, he said, “In Kashmir valley too, the communication systems whether it is landline connections or BSNL mobile numbers are being operated and are given access.”

BJP, Chief Minister, Jammu and Kashmir
And as President of BJP here, I am confident that we will have a BJP Chief Minister in Jammu and Kashmir very soon. Pixabay

“But there are still apprehensions that Pakistani agents may use the internet facilities to defame and to create mess and try to instigate the youth of the country,” he said on the internet suspension in Srinagar and other districts in the Kashmir valley.

Raina further said that Pakistani elements can instigate the youth and spread venom in the society and that is why preventive measures have been taken. “But soon you shall find all internet facilities will be opened and will be given free access,” he said.

India has on several occasions accused Pakistan of sponsoring terror and allowing its land to be used for terror activities. In recent days, the Indian Army and security forces have foiled terrorists’ attempts to enter Indian territory from the Pakistan side.

On India’s semi-high speed and feature-rich Vande Bharat Express arriving in Jammu from Delhi, he said, “We are thankful to Prime Minister Narendra Modi, Home Minister Amit Shah and Railway Minister Piyush Goyal for providing the best train that is Vande Bharat Express to Jammu and Kashmir after the revocation of Article 370.

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He said “Vande Bharat Express will provide all sorts of relief to passengers that we have seen at the overcrowded railway stations of Jammu Tawi, Katra and Udhampur. It is a big gift for the people of Kashmir,” Raina added. (IANS)