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FILE Photo: An elderly woman shows a 500 rupee note after withdrawing from her Jan Dhan account, as the government releases the second installment of the COVID-19 lockdown relief fund, in Mathura. (PTI)
FILE Photo: An elderly woman shows a 500 rupee note after withdrawing from her Jan Dhan account, as the government releases the second installment of the COVID-19 lockdown relief fund, in Mathura. (PTI)

How PM Modi's Jan Dhan Yojana is also acting as a deterrent to crime

The average balance of Jan Dhan accounts increased to 3,400 in April and declined thereafter to 3,168 in September and now marginally increased to 3,185 in October 2020

The coronavirus pandemic led to a massive 60% increase in the opening of new Jan Dhan accounts and the new accounts are acting as deterrent to crime in India, an SBI research suggests. According to the latest data available on 14 October 2020, the total number of Jan Dhan accounts stood at 41.05 crore with a total balance of 1.31 lakh crore. The SBI research states that since 1 April, around 3 crore accounts were opened, with total rise in deposits of 11,060 crore in the Jan Dhan accounts.

The average balance of Jan Dhan accounts increased to 3,400 in April and declined thereafter to 3,168 in September and now marginally increased to 3,185 in October 2020.

The report underlines that the PMJDY accounts work as a primary vehicle for labour remittances, apart from increased lending, smoothing consumption, increased spending on healthcare and most importantly the usage is more frequent in areas that are more crime prone.

To study the aspect of crime, the report maps the PMJDY accounts data with the state wise crime data.

"The Fixed Effects model indicates that with the rise in number of PMJDY accounts and balance in these accounts leads to fall in crime," said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

The report acknowledges that the genesis of crime can also be traced to interplay of various social, economic, demographic, local and institutional factors, apart from putting more money in accounts at the lower strata of society, there is evidence of PMJDY accounts having some impact on crime, the report said.

“Some of the states like Uttar Pradesh, Maharashtra and Haryana may have witnessed a lagged impact of the usage of PMJDY accounts and thus a positive impact on theft."

“States like West Bengal, Tamil Nadu and even Kerala have seen a continuous impact since inception. States like Gujarat and Karnataka have also seen a favourable impact," SBI report said.

SBI Research
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SBI Research

Soumya Kanti Ghosh recommends that the government should strive to put more money into such accounts as a sort of third fiscal stimulus, possibly through enlarging the NREGA scheme or through a scheme for urban poor.

"It is a matter of satisfaction that the usage of such PMJDY accounts in current unprecedented times has surely helped in maintaining social harmony," the report said.

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