DMPQ- “Pradhan Mantri Jan Dhan Yojana (PMJDY) has been important milestone in the journey of financial inclusion in India.” Give the arguments in favour of the statement.

Financial inclusion involves the availability of sustainable, useful financial products and services for all business and individuals, regardless of company size or individual net worth. It makes financial services such as banking, insurance, equity, etc. available equally to all, without discrimination.

Universal access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) within a reasonable distance. To cover all households with atleast one Basic Bank Account with RuPay Debit card having inbuilt accident insurance cover of Rs.1 lakh.

The government’s flagship financial inclusion drive, by virtue of sheer scale, is one of the grandest policy initiatives of its kind. With an initial target of opening 400 million accounts by 2020. The government mobilized an oft-recalcitrant state apparatus to expand access to basic savings accounts with additional benefits in the forms of debit cards and insurance cover.

PMJDY accounts are increasingly being used actively: “70% of the accounts migrate out of dormancy into active use. Activity levels in PMJDY accounts increased over time, a pattern not necessarily seen in non-PMJDY accounts.

In few low-income states socioeconomic hurdles were attenuated: women, low-income individuals, rural residents, and the less educated enjoyed greater account ownership following the PMJDY. Owning an account also appeared to weaken significant constraints like large household size, distrust of financial institutions, and distance to the nearest bank branch.

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