Impact of Pradhan Mantri Jan Dhan Yojana (PMJDY) on Socio-Economic Status and Savings Pattern: A Review of Literature

Abstract

Pradhan Mantri Jan Dhan Yojana (PMJDY) is Narendra Modi Government flagship programme launched to bring every section of the society within the ambit of financial services such as availability of basic savings bank account, access to need-based credit, remittance facility, insurance, and pension to the otherwise excluded sections, i.e., weaker sections and low-income groups. In the truest sense, PMJDY is a poverty eradication program and therefore the poor should be the biggest beneficiary of the scheme. The present research aims to study the impact of PMJDY on socio economic status and saving pattern of the people. The study uses both deductive and inductive approach to investigate the impact of government flagship program on saving pattern and economic status of the people. The study found that the Indian rural population had developed a behavior of negative savings pattern because of poor banking penetration. This behavior is expected to change after the implementation of PMJDY as the programme has been successful in opening of around 16.75 crore bank accounts i.e. 60% of the total bank accounts opened under the scheme. Also various other schemes for providing easy insurance and pension policies have received immense response propagating the idea of savings amongst the earlier negligent population. The percentage of non-operative and dormant accounts has also gone down. The public sector banks have been able to play the role of a stronger catalyst under the scheme as compared to private sector banks and regional rural banks both in rural and urban areas.