For effective cash relief in response to the COVID-19 crisis, the government must think beyond the Jan Dhan Yojana. Analyse (200 Words)
Refer - The Hindu
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· In the early days of the corona crisis, JAM was often invoked (sometimes along with UBI) as a possible tool of emergency relief.
· But when the time actually came to make cash transfers to the poor, JAM turned out to be of little use. For all the excitement it had generated, JAM had not gone beyond some fancy digital-payment systems for the privileged.
· JDY accounts are a mighty mess – the NREGA job-cards list is far more transparent and well-organised. During the frantic initial JDY wave, in 2014-15, banks opened JDY accounts en masse to meet the targets.
· Banking norms went for a toss: many accounts were opened without informed consent, duplicate accounts flourished, Aadhaar numbers were seeded without any safeguards, and so on. Later on, a large proportion of JDY accounts (40% in March 2017, down to 19% in January 2020) went “dormant” as customers were unable or unwilling to use them.
· In fact, as far as effective payment is concerned, there is a further argument in favour of the NREGA job-cards list: unlike JDY accounts, it lends itself to the “cash-in-hand” method (on-the-spot payment in cash, instead of bank payments) as a possible fallback. The reason is that the job-cards list is a transparent, recursive household list with village and gram panchayat identifiers, while the list of JDY accounts is an opaque list of individual bank accounts.
· Cash-in-hand may seem like the antithesis of JAM, but this option may become important in the near future if the banking system comes under further stress. Several states (including Andhra Pradesh, Odisha and Tamil Nadu) have already resorted to cash-in-hand for relief payments during the lockdown.
· In short, there is nothing compelling about the use of women’s JDY accounts for cash relief. In fact, it is a bit of a shot in the dark. The central government is unlikely to make a U-turn on this before the end of the Pradhan Mantri Garib Kalyan Yojana’s initial three-month period. It would do well, however, to consider other options after that, including a switch to the NREGA job-cards list in rural areas. As for the JAM trinity, it should come down to earth for a reality check.
Deepika 5 years
Please give feedback.
IAS Parliament 5 years
anisha 5 years
Review kindly
IAS Parliament 5 years
Good attempt. Keep Writing.
