Usury & Jan Dhan Yojana Of Modi

How can the farmer safeguard her proceeds of sale of crop produce? The practice so far in India largely has been to keep the money with the buyer for withdrawal from time to time. Alternatively, it can be kept at home. Prime Minister Narendra Modi has facilitated the peasant & farmers to embrace banking by starting a new scheme called the Jan Dhan Yojana.

This is a unique facility for the benefit of the ordinary citizens to open a bank account with zero savings. The idea is to provide opportunity for financial inclusion to all Indians. The initial hesitation over, people have joined the scheme in a big way: 349 million account holders & deposits of Rs 673170 million. It has opened a window for the safety of the money of the peasant, farmers and workers.

Significance of the scheme needs to be understood in the context of instant erosion of incomes in the hands of low income groups and economically weaker sections of society, especially in the countryside. Demands for cash always remains unfulfilled. Cash flow in the hands of the peasant, farmer and the worker is carefully monitored hawkeyed predators. Even before she can think of deploying the income properly, the sharks launch into well designed operation to relieve her of it.

Whether it is religious ceremonies, marriage expenses, loan refunds, pilgrimage to the annual fair at the place of worship, new clothes for the children, buying utensils for the kitchen, a pair of new shoes, getting treatment for ailment, paying the lawyer, donation to the local political party or any other expenses, the demands outstrip the disposable income. In no time, the poor peasant is compelled to borrow again to run the household or buying seeds for the next sowing cycle. There is dim chance of her ever breaking the vicious circle of poverty. The loan sharks survive on this fragile financial condition as they are only too eager to sell loans to the poor at excessively high rates of interest.

The elite may not be aware of the reality in the countryside and laugh it away, but the organized way in which some of these exploiters of the economic conditions of the poor make their moves is a stark reality.

No savings means the poor run into the debt traps. There is hardly any opportunity to hold the money. Cash in hand poses a problem of safe keeping at home as the farmer has only a thatched hut or a room for a house. A bank account has provided her with a safe place to keep her money. It has endowed her with control over her money. She can plan spending in a much better way. She knows how much money lies in the savings account and how much has been spent. Besides, she earns a modest interest on it. She is eligible for overdraft & loan from the bank at reasonable rates of interest as compared to the usurious rates charged by the money lender in age old traditional creditor-debtor relationship. That makes for a revolutionary change.

It will take no more than a few years before all the peasants, farmers and workers in India will be handling their finances through banking channels. It is bound to change their economic and financial conditions, pulling them above the poverty line sooner than later.

The government of India and the state governments run many welfare schemes for the poor, farmers, economically weaker sections, senior citizens. The benefits under these schemes were not reaching the target beneficiaries. Now these benefits are transferred into their bank accounts directly.

Every accountholder is entitled to an accident insurance cover of Rs 1,00,000 at a nominal premium of Rs 1 per month. Similarly, life insurance for 2,00,000 is available for the eligible persons @333 rupees per annum premium. The proceeds of such insurance will be credited to the account of the insured person on maturity or her heir on death. This removes all kinds of middlemen and swindlers from the scene. It is such a wonderful financial security net for the poor and the farmer, who come on the roads in case of death or disability of the bread earner.


There is another benefit that the Jan Dhan Yojana has delivered to the women farmhands. Women put in equal or more labour in farm activities than men but traditionally do not own land. Their income from farming is clubbed with the income of the husband and is under his total control as far as spending goes. A major portion of the income of the farmers is misspent on liquor. Now that the women farmers and workers have their own bank accounts under the Jan Dhan Yojana, they are the masters of their incomes and destiny. This is going to drastically change the consumption pattern in the rural sector. Liquor will go out of the consumption basket and health, education and better life style is going to enter.

Why did the earlier governments not do so? Had they thought of it, the financial conditions of the farmers would have been greatly improved. But socialism for some political thinkers means raising nurseries of poverty, harvesting rich crops and ruling the poor indefinitely.

Regrettably for them, Narendra Modi has destroyed all such illegal crops and pulled the poor out of it. The drama of calling it all a failure or organizing black day protests or other outdated socialist tricks can’t stop Prime Minister Modi from going forward with the developmental agenda and service to the masses.

The socialism of the bygone era stands replaced with the Socialism of the New Era with Indian Characteristics.

There is no scope for any criticism, black day or other kind of earlier socialist militancy, whether cloaked as anti-demonetisation or anti-GST protest. It is in their interest to join the people friendly schemes launched by prime minister Narendra Modi and be a part of the transparency and development revolution of New India.

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