PM Narendra Modi has announced a ‘Jan Dhan Yojana’ for rapid fincial inclusion, which will lead to a decline in the usage of cash in India in line with developed countries. Only about 58 % households in India avail of banking services. The new Jan Dhan scheme by the Government aims to universalise banking access and financial inclusion.
To each unbanked household, the scheme will provide a bank account, a debit card and a life insurance cover of Rs. 1 lakh. With such rapid financial inclusion, the use of cash in India will also decline in line with other countries like the UK (2 per cent), Australia (3 per cent), and Japan (6 per cent). According to an RBI study, alternative payment channels like cheques, credit/ debit cards and Internet banking are not only more efficient, but also leave paper/ electronic trails, facilitating later investigations.
Further, another scheme Sansad Adarsh Gram Yojana has been announced to encourage the development of smart villages, which can effectively co-exist with smart cities as underlined in the Budget.