Jan Dhan Triggers Behavioural Changes; Villagers Consuming Less Liquor, Tobacco Now!
A recent SBI Report on the impact of Jan Dhan accounts has revealed several stunning behavioral changes in the villagers.
Last year, Trak.in team was invited by ICICI Bank to visit Akodara, India’s first cashless and digital village where ICICI Bank along with Gujarat Govt. has made every transaction cashless.
While talking with the sarpanch of the village, an old lady, I asked her what major changes can bring cashless unleash? She straight away said that unnecessary expenses are coming down, as when people don’t have cash in hand, then they don’t spend much.
This observation by an old village lady is actually proving to be true, as a recent SBI Report on the impact of Jan Dhan accounts has revealed several very stunning behavioral changes in the villagers.
Prominent among these changes are quitting tobacco and liquor, because of being cashless.
How true is that?
SBI Report: Jan Dhan Is Changing Villagers’ Habits
In 2014, immediately after coming to power, PM Modi launched the ambitious Jan Dhan Yojana, under which every Indian was to have a bank account of their own.
This Jan Dhan was planned with two main objectives: Create the trinity of Aadhaar-Jan Dhan and Mobile to offer comprehensive financial and social services, which can be tracked and measured. And make sure it receives the right recipient.
For the first ever, a study has been conducted by SBI to measure the real tangible benefits coming out of Jan Dhan scheme, especially after record 30 crore Jan Dhan accounts were opened after November 8th, when demonetization kicked in. This special research was done to understand the true impact of Jan Dhan account and how financial inclusion of villagers changed the rural and urban consumer price index (CPI).
And the results are pretty interesting.
As per the research, consumption of liquor and tobacco has reduced, especially in those states where Jan Dhan has been a roaring success.
Soumya Kanti Ghosh, group chief economic adviser at SBI said,
“We observed that there is both statistically significant and economically meaningful drop in consumption of intoxicants such as alcohol and tobacco products in states where more PMJDY accounts were opened,”
Jan Dhan and Cashless Triggering Behavioral Changes?
Take for instance, three states where the Jan Dhan accounts were opened highest in the country: UP, Bihar and West bengal.
4.7 crore new Jan Dhan accounts were opened in UP, which means 60% of rural population is now covered under this scheme. And, as SBI observed, consumer price index (CPI) for tobacco and liquor has reduced by 2.3.
At the same time, the same CPI has reduced by 0.9 in Bihar and 4.6 in West Bengal, where 3.2 crore and 2.9 crore Jan Dhan accounts were opened respectively.
The report says, “The analysis confirms that besides formalisation of the economy, financial inclusion has had tangible benefits which is visible in the inflation data,”
Experts are also claiming that such massive behavioral changes in possible, when it comes to cashless economy.
N R Bhanumurthy, professor at the National Institute of Public Finance and Policy (NIPFP) said,
“There could be behavioural changes happening. But the most important thing is that Jan Dhan accounts are promoting a culture of saving and helping to curb spending on alcohol and other such items,”
Of Course, we need more studies to verify the claims, but one thing is clear: greater financial inclusion and more cashless means better lives for all.
We will keep you updated as we receive more updates.