Restore ₹500 payout to women beneficiaries of Jan Dhan Yojana, say analysts

KR Srivats New Delhi | Updated on August 13, 2020

‘Need measures to put more cash on the hands of vulnerable, stoke rural demand’

There is an increasing clamour that Centre should restore the monthly ₹500 payout to women beneficiaries of Pradhan Mantri Jan Dhan Yojana given the continuation of tepid economic activity in the country post Covid-19.

According to economists and analysts the time may be ripe for the Centre to restore the ₹500 monthly credit to the nearly 20 crore Jan Dhan women beneficiaries as was done in the months of April, May and June this year with festival season round the corner and the Covid-19 induced loan moratorium expected to end this month.

The Centre must come up with further steps that will put more cash in the hands of vulnerable people and stoke demand in the country, they feel.

Out of the ₹20 lakh crore Atmanirbhar package announced, only about ₹2 lakh crore (one per cent of GDP) could be actually counted as stimulus and was inadequate for country as large as India, economists said.

The ₹30,000 crore that was spent on earlier three instalments for women beneficiaries of Pradhan Mantri Jandhan accounts need to be supplemented and continued given the collapse of the economy and no sight of recovery despite India moving into ‘unlock 3.0’, said experts.

“I do think that if not now at least in a month from now, the government needs to do some demand pick up measure to make sure that cash circulation in the rural level increases,” Abizer Diwanji, Partner and National Leader-Financial Services, EY India, told BusinessLine.

He said that the government should do some kind of cash replenishment and pointed out that other governments across the world are giving cash replenishments for consumption. The ₹500 under Jan Dhan Yojana given for April-June was acting as savings booster and not as consumption booster, he said.

Vijay Pratap Singh Aditya, CEO, Ekgaon Group, said it is imperative on the government to continue its food programme for another year, and supplement household income also for a similar period, by Direct Cash Transfers under PMKisan as well as to the Jandhan Accounts. These measures might help infuse liquidity in rural economy and push demand, he said.

“I also believe it is right time now for the government to seriously think of Universal Basic Income, to the poorest households of India, it is already doing that through various measures such as MNREGA, Food Subsidies, Jandhan transfers, PMKisan and various pension schemes. It is time all such schemes be merged as a single monthly transfer ensuring Universal Basic Income to the poorest families in India. If it does Government of India would be the first in the world to do that!,” Aditya said.

Seema Prem, CEO of FIA Global, said: “In the run up to the festival season, people are looking forward to another stimulus package. Another round of stimulus will give demand boost and lead to faster economic recovery”.

Aditya noted that rural farming household income as per Nabard’s All India Rural Financial Inclusion Survey (NAFIS) shows that average agriculture household income was a mere ₹8,931 per month in 2016-17, the amount has decreased over years and has collapsed post Covid-19.

Published on August 13, 2020

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