There can be little doubt that, as The Indian Express reported, the practice of bank managers depositing one rupee in various Jan-Dhan bank accounts to show that the number of zero-balance accounts was falling rapidly is not only deplorable, it is illegal since it is unauthorised use of someone else’s account—if one rupee could be put in, so could a lot more, effectively ensuring these accounts become an easy conduit for storing black money. This may have been done under pressure from the government or it may just have been overzealous bank officials who wanted to show the prime minister’s flagship project was not a dud as most said it would be—after all, several such pushes for no-frills accounts have been tried in the past and, after the initial flurry, nothing much comes of them.
But to dismiss Jan-Dhan as a giant con would not just be unfair, it would mean paying no attention to the other data that points to a very encouraging story. While the number of accounts rising quite dramatically from 12.5 crore in January 2015 to 24.3 crore this month is itself a big achievement, the fact that the balances in them has risen from R10,499 crore to R42,504 crore is even more creditable—surely it is no one’s case that PSU bank managers managed to find over R30,000 crore over a period of 21 months to put into these accounts? Even more creditable is that over half these accounts have been seeded with Aadhaar numbers already—that means future payments from the government to these account-holders cannot be siphoned off to anyone else. Close to 80% of these bank account-holders have been given RuPay accounts, making it that much easier for them to transact and banks have already started lending against the cash-flows in some of these accounts—granted, at under 1% of the bank accounts, the numbers availing of overdraft facilities is tiny, but at least a start has been made. This R42,504 crore is partly the earnings of the poor and partly the money the government is paying directly into their accounts for, say, working on MGNREGA. Instead of using zero-balance accounts as the yardstick by which to judge Jan-Dhan, it would be more fruitful to see how much government money is flowing into these accounts over a period of time and to see how much of annual welfare payments are being converted into monthly cash outgo since that has even more salutary benefits—moving away from PDS rations to cash, for instance, would mean that FCI’s costs are not passed on to the poor.