Despite Jan Dhan’s record-breaking feats, basic savings account penetration in most states is still relatively low – 46% on average and above 75% in only two states, said the Economic Survey on Friday. It said that the government should improve financial inclusion by developing banking correspondent and mobile money networks, while in the interim considering models like BAPU—Biometrically Authenticated Physical Uptake.

Our JAM (JAM Trinity—Jan Dhan, Aadhaar, Mobile) preparedness index suggests that the main constraint on JAM’s spread is the last-mile challenge of getting money from banks into people’s hands, especially in rural areas, pointed out the survey written by economic adviser Arvind Subramanian.

In addition, the economic survey recommended reducing the subsidised LPG refills with limited genuine exclusion to 10 from 12 cylinders in a year. Policymakers thus need to be cognisant about exclusion errors due to DBT not reaching un-banked beneficiaries, it said.

The current government has built on the previous government’s support for the Aadhaar program – 210 million Aadhaar cards were created in 2015, at rate of over 4 million cards per week. At present, 975 million individuals now hold an Aadhaar card – over 75% of the population and nearly 95%of the adult population.

Large-scale, technology-enabled, real time Direct Benefit Transfers can improve the economic lives of India’s poor, and the JAM Trinity can help government implement them, said the survey tabled by finance minister Arun Jaitley in Parliament on Friday.

Elaborating further, it said the centre should prioritise areas where it has the highest control over the first and middle-mile factors and leakages are high.

“At present, the most promising targets for JAM are fertiliser subsidies and within government fund transfers–areas under significant central government control and with substantial potential for fiscal savings,” the survey said.

The example of MGNREGA highlights that delivering within-government transfers via JAM can help other centrally sponsored schemes reduce idle funds, lower corruption and improve the ease of doing business with government, it said.

Policy matters
* The DBT scheme for LPG reduced leakages by 24%. The survey said 97%  of LPG is consumed by the richest 30% of households
* Need to improve financial inclusion by developing banking correspondent
* At present, 975 million individuals now hold an Aadhaar card – over 75% of the population and nearly 95%of the adult population