“Jan dhan yojana” is Modi’s inflation


You’re free to disbelieve my apolitical assertions, but you’re not free from the economic consequences of disbelieving it. Mainly many readers quickly develop opinion after seeing the “seen” side, but very few like me dare to decipher and decode the “seen” sides and attempt to chalk down the “unseen” cost involved (for example: http://yka.be/ZnRmzw), in this century of uncommon-sense. When you view the economic textbooks, you might see this definition on inflation: “persistent rise in general level of the prices”. I can bet you that these all [static] textbooks don’t attempt to critically teach you: The government intentionally causes the poverty;  it later claims to solve.  Read this article by Ludwig von Mises to exactly know what inflation is. Anyways, I believe that there are no more economical accidents. All political dramas are plotted with the esoteric intentions to sustain and expand power, and their dramatists repeatedly ask you an imbecilic question: “Without government, who will build the roads?” This power, nevertheless, injects into all realm. This article is an abstractive attempt to notify the sheeples about how the said headline will cause inflation and leave no hope for the deletion of fractional reserve banking system of apoplithorismosphobic Reserve Bank of India.  

Jan Dhan Yojana is an ambitious scheme by India’s PM Narendra Modi for comprehensive financial inclusion. He had announced this scheme on his first Independence Day speech on 15 August 2014.  On the inauguration day, 1.5 Crore (15 million) bank accounts were opened under this scheme. By September 2014, 3.02 crore accounts were opened, with around 1500 crore (US$240 million) were deposited under the scheme, which also has an option for opening new bank accounts with zero balance. In a run up to the formal launch of this scheme, the Prime Minister personally mailed to CEOs of all PSU banks to gear up for the gigantic task of enrolling over 7.0 crore (75 million) households and to open their accounts. In this email he categorically declared that a bank account for each household was a “national priority”. The scheme has been started with a target to provide ‘universal access to banking facilities’ starting with “Basic Banking Accounts” with overdraft facility of Rs.5000 after six months and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card. In next phase, micro insurance & pension etc. will also be added. Under the scheme:

  1. Account holders will be provided zero-balance bank account with RuPay debit card, in addition to accidental insurance cover of Rs 1 lakh.
  2. Those who open accounts by January 26, 2015 over and above the Rs1 lakh accident, they will be given life insurance cover of Rs 30,000.
  3. Six months of opening of the bank account, holders can avail Rs 5,000 loan from the bank.
  4. With the introduction of new technology introduced by National Payments Corporation of India (NPCI), a person can transfer funds, check balance through a normal phone which was earlier limited only to smart phones so far,
  5. Mobile banking for the poor would be available through National Unified USSD Platform (NUUP) for which all banks and mobile companies have come together,


I believe that this” jan dhan yojana” is nontheless a loan circus. Since the nationalization of banks by former and late PM Indira Gandhi, the gap between poor people and rich class has widened. This was followed in the 1980s by the Integrated Rural Development Programme (IRDP), providing concessional loans of Rs 4,000-6,000 to the poor to buy income-generating assets. Public sector banks were forced to give mass loans in stadiums. Later evaluation reports showed that loan beneficiaries were overwhelmingly non-poor. Bank staff demanded bribes of up to one-third the subsidy. Politicians of all parties told borrowers not to repay. So, default was massive. The impact on poverty was negligible.

Only 35.2% of Indian adults have bank accounts today. But his new scheme ignores lessons from failures of the Congress models he is extending. The first lesson is that speed and mass loans will yield blazing headlines and initial praises for effort, but will prove recipes for failure. The naive may be impressed that the scheme was launched within a fortnight of Modi’s announcement, in his Independence Day speech, and that no less than 15 million bank accounts were opened on the first day. In fact, this is utterly dismaying. By the way, is the Indian banking system prepared to counter the ‘smurfing’ of jan dhan yojana scheme? Even if it is yes, it leaves no catallactic scope for the rise of methodological individualism

Suggested reading: How inflation helps the rich people.

About Jaimine

An anarchist habituated with critical thinking and passionate to liberate many subconscious minds.

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