CONTENTS
- Pradhan Mantri Jan-Dhan Yojana
- Aatmanirbhar Bharat Rozgar Yojana
Pradhan Mantri Jan-Dhan Yojana
Context:
The Pradhan Mantri Jan Dhan Yojana (PMJDY) has successfully completed nine years of implementation.
Relevance:
GS II- Welfare schemes
Dimensions of the Article:
- About Pradhan Mantri Jan-Dhan Yojana:
- Extension of PMJDY with New features
- The road ahead
About Pradhan Mantri Jan-Dhan Yojana:
Pradhan Mantri Jan-Dhan Yojana – PMJDY was announced by Prime Minister in 2014, and has been a key initiative towards the commitment to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes.
Background
Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
Objectives
- Ensure access of financial products & services at an affordable cost
- Use of technology to lower cost & widen reach
Basic tenets of the scheme
- Banking the unbanked – Opening of basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance & zero charges
- Securing the unsecured – Issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakhs.
- Funding the unfunded – Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit
Initial Features: 6 Pillars based on which the scheme was launched
- Universal access to banking services – Branch and BC
- Basic savings bank accounts with overdraft facility of Rs. 10,000/- to every household
- Financial Literacy Program– Promoting savings, use of ATMs, getting ready for credit, availing insurance and pensions, using basic mobile phones for banking
- Creation of Credit Guarantee Fund – To provide banks some guarantee against defaults
- Insurance – Accident cover up to Rs. 1,00,000 and life cover of Rs. 30,000 on account opened between 15 Aug 2014 to 31 January 2015
- Pension scheme for Unorganized sector
Important approach adopted in PMJDY based on past experience:
- Accounts opened are online accounts in core banking system of banks, in place of earlier method of offline accounts opening with technology lock-in with the vendor
- Inter-operability through RuPay debit card or Aadhaar enabled Payment System (AePS)
- Fixed-point Business Correspondents
- Simplified KYC / e-KYC in place of cumbersome KYC formalities
Extension of PMJDY with New features
The Government decided to extend the comprehensive PMJDY program with some modifications
- Focus shift from ‘Every Household’ to Every Unbanked Adult’
- RuPay Card Insurance – Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakh for PMJDY accounts opened after 28.8.2018.
- Enhancement in overdraft facilities –
- OD limit doubled from Rs 5,000/- to Rs 10,000/-; OD upto Rs 2,000/- (without conditions).
- Increase in upper age limit for OD from 60 to 65 years
The road ahead
- Endeavour to ensure coverage of PMJDY account holders under micro insurance schemes. Eligible PMJDY accountholders will be sought to be covered under PMJJBY and PMSBY. Banks have already been communicated about the same.
- Promotion of digital payments including RuPay debit card usage amongst PMJDY accountholders through creation of acceptance infrastructure across India
- Improving access of PMJDY account holders to Micro-credit and micro investment such as flexi-recurring deposit etc.
Aatmanirbhar Bharat Rozgar Yojana
Context:
The Aatmanirbhar Bharat Rozgar Yojana (ABRY) has surpassed its initial employment generation targets, demonstrating its effectiveness in promoting job creation and aiding the recovery efforts amidst the Covid-19 pandemic.
Relevance:
GS II: Government policies and Interventions
Dimensions of the Article:
- Aatmanirbhar Bharat Rozgar Yojana (ABRY)
- Significance
Aatmanirbhar Bharat Rozgar Yojana (ABRY)
- ABRY started on October 1, 2020, with the primary aim of boosting job creation.
- It provided financial support to employers of businesses registered with the Employees’ Provident Fund Organisation (EPFO).
- The scheme targeted incentivizing employment, including for individuals who lost jobs due to the pandemic.
- It covered both employer and employee contributions, totaling 24% of earnings, for firms with up to 1000 employees.
- For larger companies (over 1000 employees), ABRY covered only the employee’s EPF payments, which are 12% of salaries.
Achievements:
- As of July 31, 2023, ABRY surpassed its initial employment generation goal, with approximately 7.58 million new employees enrolled.
Significance:
- The initiative played a crucial role in revitalizing the job market, contributing to the broader economic recovery during the pandemic.
