According to CRISIL, the Pradhan Mantri Jan-Dhan Yojana which was launched in August 2014 has made ‘astounding progress, garnering over 30 crore deposit accounts.’ (Image: Reuters)

The Narendra Modi-led government’s efforts surrounding Jan Dhan Yojna is bearing fruit, as a latest CRISIL report says that Financial inclusion has improved significantly in India, driven by strong growth in deposits and credit accounts. According to CRISIL, the Pradhan Mantri Jan-Dhan Yojana which was launched in August 2014 has made ‘astounding progress, garnering over 30 crore deposit accounts.’

The report says that the launch of Jan Dhan Yojana has led to 60 crore new deposit accounts or twice the number opened between fiscals 2010 and 2013. “Half of the 42 crore new deposit accounts opened between fiscals 2015 and 2016 were under Jan-Dhan,” the report observed. According to CRISIL Inclusix, India’s score in financial inclusion in 2016 now stands at 58 out of 100, with 14 districts having a Inclusix score of 100. Earlier, this score was 50.1 in 2013.

CRISIL Inclusix initiative was carried out with inputs from Reserve Bank of India, the MicroFinance Institutions Network and Pension Fund Regulatory and Development Authority, along with Insurance Information Bureau of India. Apart from Jan Dhan, the government’s efforts relating to Aadhar too has shown significant result, as Aadhaar and mobile trinity is slowly but surely making a seminal difference to financial inclusion, the report said.

However, the insurance has significant under-penetration, as the total number of life cover policies issued in India is 34 crore, barely 20% of the 165 crore deposit accounts. Further, over 90% of these are savings-linked insurance products. “Clearly, there exists big opportunity for more inclusion,” CRISIL said.

Lauding the government’s overall initiatives for financial inclusion, CRISIL said that the National Health Protection Scheme announced in Union Budget 2018 is a landmark initiative that aims to take basic health insurance cover to over 10 crore economically disadvantaged families. According to CRISIL, Over 75.2 lakh subscribers were added to the National Pension System (NPS) between fiscals 2013 and 2016.

CRISIL notes that the recent RBI initiatives to boost financial inclusion such as the new guidelines on differentiated banking licences for small banks and payments banks and approvals for 10 will lead to an improvement in financial inclusion over the near-term.