If Jan Dhan covers 99.7% households, why do 40% of Amul dairy farmers not have a bank account?

If you go by the figures put out by the Pradhan Mantry Jan Dhan Yojana (PMJDY) almost all households in India have a bank account, a triumph of the government's ambitious financial-inclusion programme. Unfortunately, this claim has been repeatedly found to be suspect, possibly because of false reporting by public sector banks (PSBs) who have been forced to lead the Prime Minister Narendra Modi’s ambitious enrolment programme. We now have fresh evidence of how hollow this claim could be.

On Friday, Amul, a brand owned by Gujarat Co-operative Milk Marketing Federation (GCMMF), has put out an ad that says “36 lakh GCMMF farmers thank the PM for the demonetisation drive.” The copy of the ad says that the Board of GCMMF in the meeting held on 23 November 2016, whole-heartedly welcomed the decision of demonetisation and resolved to ensure that all payments of about Rs450 crore per week will be directly sent to the dairy farmers’ bank accounts.”

This is a great idea except that the next sentence lets the cat out of the bag. The ad goes on to reveal that “More than 60% of the members already have bank accounts, and Doodh Mandals are requested to transfer money to the farmers’ accounts only. The process of new account opening for the remaining farmers has also been initiated with the support of the banks, thereby including everyone in the banking system.”

It simply means that as a high as 40% of dairy farmers associated with Amul do not have a bank account! This would jolt those who tend to believe government data blindly. Remember, GCMMF is one of the most prosperous organisations, which was set up way back in 1946 by Dr Verghese Kurien. Amul takes on multinationals head on and beats them. It is the subject of management case studies. There are stories of how its has brought massive prosperity to hundreds of villages. There is a movie made on it.

And now we learn that 40% of dairy farmers connected to this prosperous organisation do not even have a bank account! If so, what would be case with farmers in other states not to speak of labourers? How many of them actually would have bank accounts?

According to the government portal pmjdy.gov.in, there are 25.78 crore Jan Dhan accounts today since this scheme was launched in 28 August 2014. In January 2015, the government claimed that Jan Dhan covers 99.7% households, as per a Times of India report . Another report in Business Standarad in February 2015 says that nearly every Indian household has a bank account

Jan Dhan was the first among many ambitious schemes launched by the present government. Under the scheme, number of people added to the country's banking system in the last two years was much higher than that in the period from 2001 to 2011. According to census data, only 36% of Indian households had access to banking services in 2001; this increased to 59% in 2011. According to the government portal for PMJDY, there are 25.78 crore Jan Dhan accounts today.

In September 2015, Dr Raghuram Rajan, former Governor of the Reserve Bank of India (RBI) had cautioned against targeting just the numbers. He had said, "The system is going to be a waste if what we do generates a whole set of duplicate accounts… It is going to be a waste if those accounts are not used; they open and they languish. Many of the persons coming into the system are coming for the first time; so if we do not make a good first impression, they will stay out. Let us ensure it works."

We now know that not even enough of accounts have been opened.