For the first time in the last eight months, total balance in Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts has come down significantly in April.

As per latest government data, total balance in Jan Dhan accounts decreased to ₹1,43,297 crore as on April 28, 2021 as against ₹1,46,084 crore in the beginning of the month, a drop of ₹2,787 crore.

An analysis of total balance trajectory shows that generally the increase per month ranges from ₹1,000 crore to ₹1,500 crore.

During March, there was an addition of ₹5,882 crore in the accounts opened under the Centre’s flagship financial inclusion scheme which was attributed to the ‘push’ given by the elections in five States.

“But for the first time in the last eight months, we notice a decrease in total balance, which is a noteworthy point,’’ a senior State Bank of India official told BusinessLine .

The data show that it was in August 2020 (during the first wave of the pandemic) there was a decrease in balance from ₹1,32,538 crore (in July 2020) to ₹1,29,719 crore.

A recent report from SBI states that the bank’s business index, which has been declining in April 21, has now dipped to a new low of 75.7, the level it has attained in August 2020, and a clear 24.3 per cent drop from the pre-pandemic level.

“This indicates that the disruption caused by increased lockdowns/restrictions in various States is now having a meaningful impact on economic activity,’’ it says.

‘Early signs’

According to a top executive of a major public sector bank, there are more withdrawals from rural areas, especially in pockets where there is massive incidence of the second wave of Covid. “These are, of course, early signs, we need to analyse further.’’

“With more States announcing lockdown, the earnings of working class and wage earners have been adversely impacted. There has been a dip in urban to rural remittances in some States. This might be leading to withdrawals from the zero balance accounts,’’ he said, adding that the government ‘needs to act urgently’ to lessen the impact of the pandemic on the rural poor.

There has also been a decrease in number of new Jan Dhan accounts opened in April 2021 compared to April. While in March 2021, about 50 lakh new accounts were opened, approximately 30 lakh new accounts got added last month.

Purpose of the scheme

The dip in Jan Dhan account balance also proves that the intended purpose of the scheme is being met as people now use the savings in their accounts in tough times, Prasanna Tantri, Executive Director, Center for Analytical Finance, Indian School of Business, said.

“This also shows increasing financial literacy on the part of the account holders most of whom are poor,’’ he added pointing out that the impact of the second wave of the pandemic is still not as bad as it was during last year April-May, he said.

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