CMA Pravir Kumar (FCMA)



Prandhan Mantri Jan Dhan Yojan (PMJDY) is dream project of PM launched by government of India to open bank account of fellow citizens of our beloved country launched on 28th August 2014 by Prime Minister Sh Narendra Modi which was announced by him on his very first Independence Day address from Lal Qila on 15th August 2014. This is National Mission for financial inclusion, remittance, credit, insurance, pension in affordable manner. PMJDY is run by Department Of Financial Services, Ministry Of Finance. In the very first week more than 1.8 Caror bank account were opened and as of now bank accounts have crossed over 24 Caror mark having more than Rs. 35000 Caror deposited in those accounts generating 30 Lakhs transactions per day with an average transaction value of Rs. 2000.

Under the scheme account holders have been provided zero balance bank account with RuPay debit card and inbuilt accidental insurance cover of Rs. 1 Lakh and life insurance cover of Rs. 30000along with overdraft facility for Rs. 5000/- for six month old accounts. Account holders have also been provided technological support by National Payment Corporation Of India by introduction of new technology for transfer of funds, check balance through normal phone which was earlier limited only to smart phones.

Benefits to Individuals

PMJDY is serving the noble cause of financial inclusion of all those deprived class who were ignored by our system, banks, and contemporary governments since very auspicious independence from centuries of foreign power. We might have got political independence but PMJDY is the unique tool to give us financial independence in real terms.

The bank account will boast at least one member of each family of having bank account. By this people will be encouraged to do cashless transactions for purchases. Inbuilt accidental insurance and life insurance cover is a step towards social empowerment in case of sudden demise to safeguard against financial bankruptcy of poor or people living below poverty line.

Also overdraft facility can be utilised in case of financial eventuality. Those who are suffering in hands of local money lenders from whom poor villagers take very small amount of loan at 20-30 per cent rate of interest, even at higher rates sometimes, can also be addressed by overdraft facility.

Public at large will be transferred subsidy money directly into bank account bypassing any middleman, also real time fund availability will be ensured to beneficiary.It will be great relief for persons living below poverty line by of transferring food subsidy into bank account directly. They need wait for getting subsidised food by making queue in front of ration shop authorised by government, else they can purchase it in open in open market. Students can be given scholarship instantly, so that they can use this money prudently on their education, purchase of books and to fund other day to day expenses hassle free. It gives immense grief to see senior citizens and Divyangs roaming here and there, knocking door to door from panchayat head to egoistic official for want of their grant which is nothing but equivalent to peanut. By PMJDY, empowerment of those downtrodden people is also ensured not fully but to some extent. Enriching them by way of crediting government grant into their bank account, we can purchase a moment of smile for them also. In return we can be blessed with their best wishes, their glazing faces, giving them healthy as well as satisfactory life if not other achievements.

We are having largest population dependent on agriculture on globe, but needless to say that condition of those fellow countrymen is pathetic. We need to think upon it, why this is, what is the available remedy, what else can be done to improve their financial as well as social health, last but not the least how to implement those tools so that they also get their due share of development. Only solution come in my mind is that the fair price must be given to farmers, insurance of crops be ensured and subsidy meant for them to be ensured to reach in their kitty. These all are possible by crediting subsidy directly into their bank account, cash payment be eradicated and replaced by NEFT/RTGS/IMPS into bank account of farmers for purchase of farm produce by any government agency, insurance amount also be transferred in same way as above in case of any crop damage by natural calamity or otherwise.

All of us know transfer of LPG subsidy in bank accounts has been great success for individuals. This has saved about one third of LPG subsidy, almost eradicated black marketing of LPG, ensured availability of LPG to consumers on demand.

Benefits to Government exchequer

We have discussed some of direct benefit to the citizens of India which can be availed. However we are socialist state means state will act for the benefit of society at large, their up-liftment, providing them liveable condition, making them proud citizens but how these dreams be fulfilled. There is multiple solutions for this and one of them is by providing various facilities by state. Again states money is drained into pockets of corrupt officials and middlemen which clearly indicate leakages in conduits. We can remember that once our late prime minister has openly accepted this and talked in open forum that hardly 10-15% money really reaches to the actual beneficiary and rest is pickpocketed by corrupt practices by government officials, middlemen and coalition between them along with politicians. So the solution is to put money and state benefits directly into kitty of beneficiary and generate more money along with eradication of black money.

Government has saved to the tune of Rs. 61000 caror by way of direct transfer of money into bank account (bank account opened through Pradhanmantri Jan Dhan Yojna)of citizens through various social schemes. This saved money can be utilised to capture more countrymen under net of social security and also to widen the social schemes.

Further the process of integrating bank accounts with aadhar number is also eradicating fake bank accounts. So the money kept for social scheme is really being transferred to true beneficiary and by this way leakages are being controlled to a large extent. It is suggested to link all bank account with aadhar number. Further I would like to suggest that no cash transaction be allowed above Rs. 20000 by any one, by any means. As we all know under Income Tax Act and Rules no purchase is allowed over Rs. 20000 in cash for any business concern. But there is no bar on such sales. So this has become major source of generation of black money. Many business concerns sale in cash to retailers in unorganised sectors and both seller and purchaser hide the value of transaction, in between black money generated. Also consumers purchase in cash and seller donot show most of these transactions in their books to tax, direct tax as well as indirect tax. Government has various tools to tackle the black money generated through banking channels but there is almost no tool to overcome this problem i.e. black money generated through cash transactions. In addition to this I am suggesting applying complete ban on carrying cash anything above Rs.50000 by anyone and in due course reduce it to Rs. 20000, By this way printing of currency notes of Rs. 500 and Rs. 1000 can fully stopped.

What the purpose it will serve? It is trillion dollar question. We must analyse arguments against it first. Many people will say that how small purchases and sales will get affected i.e. grocery vending, vegetable vending, milk vender, newspaper vendor, small motor mechanic etc. We all know that these vendors are not in bracket of daily sales for Rs. 20000. So these small items can be purchased and sold through cash. Smooth functioning continued to be as usual. Again if these small vendors and street vendor need to do transaction in amount higher than the amount mentioned, they are most welcome to utilise banking channels i.e to accept payment through cheque, debit card, credit card any other banking transaction mode. Truck drivers and other travelling person can carry RuPay card or any plastic form of money to avoid any cash transaction. RuPay card has been issued to PMJDY bank account holders, many other citizens have debit card or credit card which will push my suggestion to avoid cash transaction and materialise transaction through banking channel. So problem of public at large has been addressed practically and also it will serve to track transactions easily.

If no one is allowed to carry cash more than limit prescribed above hence everybody will be enforced to avoid carrying hefty cash. We know that corruption is major source of creation of black money in our country and every corrupt official takes bribe in hard cash. What they will do with this hard cash, if they cannot carry it, cannot deposit into bank, and cannot purchase goods in cash, will they keep this under the pillow, certainly hard control will be in place over bribe taking bad habit. We will be relieved from corrupt practices to the large extent if not fully curbed. Corrupt people may start asking bribe in bullion or kind, which is better because these transactions can be proved easily in eyes of law and,accused can be punished. Secondly most of cash bribe money is invested in real states and purchase of gold or bullion biscuits. Black money generated cannot be invested if cash transaction is diminished. In this way import of gold and bullion will also curbed to save valuable foreign currency. On the other hand bubble of real state property prices will be burst or will come down drastically resulting in availability of home at affordable price to public at large.

There are so many chain snatchers, vehicle thief, road robbers, underworld dons, and extortionists. They all are involved in cash transaction. Where will chain snatcher and vehicle thief sale these commodity and will they get cash, certainly not. Again what will do road robbers with the looted cash and looted commodity, these all cash and commodity cannot materialised. If there is no cash then underworld dons and extortionists will become jobless. Whether I am day dreaming, think deeply, or it can be made reality.

Our enemy countries are engage in damaging our economy by pumping in fake currency notes. No cash, hence no currency, consequently no fake currency, another problem resolved.

Circulation of plastic money will decrease the currency notes in circulation, which will in return save printing cost of currency, reduce fake currency, carrying cost of currency of the banks, transit cost of currency from one location to other. Not only this bank robbery, cash van looting, ATM damaging for want of cash will be almoststopped.

More than 70% of the workers in organised or unorganised sectors are casual workers. They earn their bread and butter on daily basis. As per law they have to be paid minimum wages with PF, ESI, bonus in industrial sector, but this is hard fact that majority of them are paid only minimum wages and sometimes not even minimum wages. Then question arises who takes PF, ESI and bonus, answer, no one other than contract manpower supplier, because these wages are paid in cash and it is not necessary that same worker works throughout the month or throughout the year or as the case may be. Hence these benefits which are meant for poor fellow are actually enriching manpower supplier. Since huge number of bank accounts has been opened, my submission to government is to make compulsory all payment to any workmen by way of direct transfer into bank account only. If this is implemented then we can boast of really empowering the poor citizens.

By implementing all suggestion given above Direct Tax collection will also be improved. Since almost all the transactions will be routed through banking channels, it will be very difficult to hide any income, hence people will file real income sources and in return income tax will be levied correctly and collected effectively.

We have seen that with the help financial inclusion by PMJDY multiple problems can be solved easily and efficiently (having bank account to public at large was major hurdle, which we have crossed), i.e empowering deprived class, eradicate corruption, annihilate black money, controlling law & order situation, overpowering enemy countries, fighting terrorism, widen tax net, collecting more revenue for the government and many more.

Jai Hind.



2.      Financial Chronicle

3.      Business Line

4.      Press information Bureau

5.      The Times of India


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One response to “Jan Dhan Yojna: Single Solution To Multiple Problems”

  1. sanjay chandak says:

    This is very good article, for reducing black money in our country

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