Given how money launderers have used them to deposit R27,000 crore in them ever since the demonetisation exercise began, it is not surprising Jan-Dhan accounts are in the news for all the wrong reasons. Yet, apart from the obvious benefits in terms of the government’s ability to push subsidies through them—for that, of course, the rate of Aadhaar-seeding needs to rise from the current 55% to 100%—Jan Dhan offers the perfect platform for ensuring full pension and insurance cover for the country’s poor.
The progress, though not necessarily just for those with Jan-Dhan accounts, has been quite impressive. In the case of the low-cost Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) where a life insurance cover of R2 lakh is available for just Rs 30 a year, over 3 crore people have already opted for this.
Similarly, for the Pradhan Mantri Suraksha Bima Yojana (PMSBY) that offers an accidental death and disability cover of R2 lakh for a mere R12 annually, more than 9.7 crore people have signed up. If the number of policy-holders for these two schemes has grown by 4% between April and November, the growth in the Atal Pension Yojana—this offers a minimum monthly pension of R1,000 if contributions of R42–291per month are made from the age of 18 to 40 years—has been a stupendous 40%, though at 3.3 million, the number enrolled is quite small.
Apart from the very affordable rates—presumably, the schemes are all fully-funded—the record so far shows payment is also very good. Data from the jansuraksha website highlights that over 90% claims were paid under PMJJBY with only 2% rejection, whereas 71% were paid in terms of PMSBY with only 14% rejection rate.
Given this, if banks are able to convince their Jan-Dhan clients of the benefits of these social sector pension/insurance schemes, the multiplier effects will be truly large—the number of those covered by insurance can increase 8-9 times since there are over 25 crore Jan-Dhan accounts, the number of accident insurance covers can rise 1.5 times more while the number of pension accounts can rise 80 times; and given the regular flow of money into these accounts once subsidy payments start getting routed, regular payment of premium is almost assured. For a country that, even a few years ago, had very little social security, this is truly a big step forward.