A major initiative of the Union Budget 2015-16 was ‘JAM’, or ‘Jan Dhan Yojana-Aadhaar-Mobile Numbers’, which is geared towards improving the quality of life of Indians. This is an initiative recommended by the Economic Survey of India. In India, macro-economic initiatives usually lose their punch by the time they reach the common person, owing to leakage of benefits and inefficient implementation. As per the economic survey, the JAM initiative is expected to touch the common person without being diluted by these inefficiencies.
The Pradhan Mantri Jan Dhan Yojana, initiated in 2014, is a comprehensive banking scheme to ensure bank accounts and several related benefits (such as Life and Accident Insurance,and pension) for all Indian households. By connecting this with the Aadhaar and the mobile numbers of individuals, the government aims at “Wiping Every Tear from Every Eye” by ensuring that all the benefits are passed directly to the common man’s bank account and through other authenticated sources, thus eliminating the need for intermediaries.
People from both urban and rural areas can open a zero balance account as part of the yojna, which comes with a RuPay Debit Card. In addition to these privileges, all accounts are managed under the Core Banking System (CBS) and support mobile banking features using Unstructured Supplementary Service Data (USSD). The advantage of USSD is that this technology works even on feature phones, thus allowing people from all sections of society to experience banking through and through.
Encouraging people to keep accounts like these active is one of the problems that has been faced by similar initiatives in the past. In order to inculcate in people the habit of using a bank account (especially those from the rural areas), the plan offers a Rs. 5,000 overdraft facility to all those who keep their accounts operational for 6 months.
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