Skip to main content

Economic Survey: Gujarat a poor performer in saving account coverage, direct bank transfer preparedness

By Our Representative
The recently released Government of India’s (GoI’s) “Economic Survey 2015-16” has come up with a major revelation: That Gujarat, which claims itself to be the financial capital of the country, has, ironically, one of the poorest saving bank penetration in the country, adversely affecting the GoI’s direct bank transfer (DBT) thrust.
In fact, the Survey also finds that Gujarat has one of the poorest DBT penetration index, too, whether it is rural areas or urban areas. No explanation has been given as to why the "model" state's banking sector is relatively poor spread. 
The Survey says that, in Gujarat, what it calls “basic saving account coverage” is just about 40 per cent, less than the national average of 46 per cent. The two-volume report, in fact, finds that as many as 15 other major Indian states out of 20 have a higher “basic account coverage” than Gujarat’s.
Pointing out that the basic account coverage is particularly important because of the Government of India’s thrust on direct bank transfer, the Survey says, “After identifying beneficiaries, the government must transfer money to them. Every beneficiary needs a bank account and the government needs their account numbers.”
While claiming that “this constraint has been significantly eased by the Pradhan Mantri Jan Dhan Yojana, under whose auspices nearly 120 million accounts were created in the last year alone— at a blistering, record-setting pace of over 3 lakh accounts per day – the Survey says, “despite Jan Dhan’s record-breaking feats, basic savings account penetration in most states is still relatively low – 46 per cent.”
Pointing out that it is “above 75 per cent in only two states (Madhya Pradesh and Chattisgarh)”, the Survey says, “Policymakers thus need to be cognizant about exclusion errors due to DBT not reaching unbanked beneficiaries.”
“In rural India, the Survey says, “There is a serious last-mile problem of getting money from banks into household’s hands: only 27 per cent of villages have a bank within 5 km.”
Coming up with yet another inter-state comparison – direct bank transfer (DBT) index, the survey, simultaneously, finds that Gujarat is one of the poor performing states. Thus, with 27 per cent DBT preparedness score in urban areas and a mere 2.19 per cent in the rural areas, the Survey says, “The binding constraint (for DBT) is basic bank account penetration—paying beneficiaries is the issue, not identifying them.”
Among urban areas, the Survey says, “There is significant variation across states. Some, like Madhya Pradesh and Chattisgarh, show preparedness scores of about 70 per cent. Others, like Bihar and Maharashtra, have scores of only about 25 per cent.”
Coming to the rural areas, the survey says, “The DBT rural preparedness scores are significantly worse than the urban scores, with an average of 3 per cent and a maximum of 5 per cent (Haryana).”
Interestingly, the Survey finds that in urban areas, as many as 14 major Indian states have a better DBT preparedness than Gujarat. As for the rural areas, the Survey reveals that as many as 16 out of 20 major Indian states have a better DBT penetration than Gujarat.

Comments

TRENDING

India under Modi among top 10 autocratizing nations, on verge of 'losing' democracy status

By Rajiv Shah
A new report, prepared by a top Swedish institute studying liberal democracy, has observed that there has been a sharp “dive in press freedom along with increasing repression of civil society in India associated with the current Hindu-nationalist regime of Prime Minister Narendra Modi.” The report places India among the top 10 countries that “have autocratized the most”. Other countries that have been identified for rolling towards autocracy are -- Hungary, Turkey, Poland, Serbia, Brazil, Mali, Thailand, Nicaragua and Zambia.

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam*
RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Border conflict? RBI nod India's 'brotherly' help to China internationalise its currency

By Bhabani Shankar Nayak*
In the middle of a global pandemic, China started an unprovoked border conflict with India. It unraveled trust deficit and ties between the two neighbours. As thousands of Chinese troops tried occupying Indian territory, the Narendra Modi-led BJP government directs the Reserve Bank of India (RBI) to allow the Bank of China to start regular banking services in India. The Bank of China will now operate in India like any other commercial banks.

RSS supremo Deoras 'supported' Emergency, but Indira, Sanjay Gandhi 'didn't respond'

By Shamsul Islam*
National Emergency was imposed on the country by then Prime Minister Indira Gandhi on June 25-26, 1975, and it lasted for 19 months. This period is considered as ''dark times' for Indian democratic polity. Indira Gandhi claimed that due to Jaiprakash Narayan's call to the armed forces to disobey the 'illegal' orders of Congress rulers had created a situation of anarchy and there was danger to the existence of Indian Republic so there was no alternative but to impose Emergency under article 352 of the Constitution.

Letter to friends, mentors: Coming together of class, communal, corona viruses 'scary'

By Prof (Dr) Mansee Bal Bhargava*
COVID greetings from Ahmedabad to dear mentors and friends from around the world…
I hope you are keeping well and taking care of yourself besides caring for the people around you. I’m writing to learn how is the science and the society coping with the prevention and cure of the pandemic. I’m also writing to share the state of the corona virus that is further complicated with the long-standing class and communal viruses.

Clean chit to British rulers, Muslim League? Karnataka to have Veer Savarkar flyovers

By Shamsul Islam*
The BJP government of Karnataka led by BS Yediyurappa is going to honour Hindutva icon VD Savarkar by naming two of the newly built major flyovers in Bangalore and Mangalore after him. There was a huge uproar against this decision of the RSS-BJP government as many pro-Kannada organisations with opposition parties and liberal-secular organizations questioned the logic to ignore so many freedom fighters, social reformers and others from within the state.

Hurried nod to Western Ghat projects: 16 lakh Goans' water security 'jeopardised'

Counterview Desk
Taking strong exception to "virtual clearances" to eco-sensitive projects in the Western Ghats, the National Alliance of People’s Movements (NAPM) in a statement has said urged for a review of the four-lane highway, 400 KV transmission line and double tracking of the railway line through the Bhagwan Mahavir Wildlife Sanctuary and Mollem National Park in Goa.

Disturbing signal? Reliance 'shifting focus' away from Indian petrochemical sector

By NS Venkataraman*
Reliance Industries Ltd (RIL), a large Indian company, has expanded and grown in a spectacular manner during the last few decades, like of which no industrial group in India has performed before. RIL is now involved in multi various activities relating to petroleum refineries, petrochemicals, oil and gas exploration, coal bed methane, life sciences, retail business, communication network, (Jio platform) media/entertainment etc.

Case for nationalising India's healthcare system amidst 'strong' private control

Counterview Desk
A draft discussion note, prepared by Dr Maya Valecha, a Gujarat-based gynecologist and activist, sent to the People's Union for Civil Liberties (PUCL) as also a large number of activists, academics and professionals as an email alert, is all set to create a flutter among policy experts for its strong insistence on nationalizing India’s healthcare system.