As Narendra Modi government is rolling out various initiatives to accelerate growth and ameliorate the standard of living of the 1.2 billion people, Sameer Kochhar’s new book titled Defeating Poverty: Jan Dhan and Beyond should be an eye-opener for policymakers of yesteryears as well as those at the helm right now. While poverty eradication has been a national priority since the day India attained Independence, the country still has about 300 million people surviving on subsistence income. The book analyses what were the shortcomings of various macroeconomic policies of the past six decades—be it government’s expensive welfare schemes or those pertaining to banking and financial inclusion, or even the industrial and agriculture policies—and makes specific recommendations on the way forward. While releasing the book in New Delhi, Minister for Urban Development, Housing & Urban Poverty Alleviation and Parliamentary Affairs, M Venkaiah Naidu, endorsed the author’s view that a multi-pronged strategy was needed to root out poverty. Jan Dhan along with other flagship schemes–Make in India, Smart Cities, Swachh Bharat, Digital India and Skill India, will help in addressing poverty. “Modiji’s aim is to empower all Indians. If you have to eradicate poverty, you have to create wealth.… Whatever development scheme we have, we need to ensure that it is better targeted,” Naidu said. “Stability coupled with ability will bring prosperity.”
While policymakers were targeting to attain the financial inclusion goal in five years, Naidu said the Prime Minister insisted that it should be attained in one year through launch of Jan Dhan in a mission mode. “Within seven weeks, seven crore new bank accounts were opened. Where there is a will, there is a way,” he said referring to the initial success of Jan Dhan. In this context, the book assumes importance as it examines the viability of Jan Dhan in a pragmatic manner and goes on to suggesting solutions.
Yashwant Sinha, former Union Finance Minister, says the book provides “valuable policy insights” on what are the problems that Jan Dhan can confront and how it ought to be addressed. “The book evokes a thought process on how to integrate the three things – social inclusion, financial inclusion and digital inclusion – to address poverty. In the past, these were viewed in isolation and never thought to be a part and parcel of a poverty alleviation programme. When one retrospects on why poverty eradication has fallen short of expectations, one cannot disagree with the author’s views,” says Sinha, also former Chairman of Parliamentary Standing Committee on Finance.
While lauding the initiatives taken by the Modi government, Sinha appreciates the author for not just stopping at pointing out potential problems in the Jan Dhan scheme but also making a host of specific recommendations in the concluding chapter that not just focuses on Jan Dhan but also touches upon small businesses, rural and urban livelihood, healthcare and sanitation. “This makes the book even more comprehensive in suggesting ways of defeating poverty,” he says.
In his foreword, C Rangarajan, former Governor of the Reserve Bank of India and former Chairman of the Economic Advisory Council to the Prime Minister, says the book is “both timely and relevant”. “The main message coming through from the book is that for financial inclusion to succeed, it must be integrated with other programmes relating to poverty alleviation. It cannot be a standalone exercise. Sameer has made an important contribution to the discussion on financial inclusion by emphasising this link,” he said adding policymakers must continue to follow two-fold strategy of helping the economy to grow fast and attacking poverty directly through poverty alleviation programmes and financial inclusion can play an important part in this. The book provides “an in-depth analysis of various critical issues that need to be addressed in this process”.
Speaking in unison with Kochhar’s views, Competition Commission of India Chairman Ashok Chawla, said: “Mere opening of no-frills accounts is statistical inclusion. For financial inclusion, you need a holistic approach.” As pointed out in the book, Chawla said, there was a need to increase credit flow through non-banking finance companies. With caps on lending rates and floors on deposit, microfinance institutions stand at a juncture marked with uncertainty, he said. “Relevant chapters in the book offer several choices to policymakers.” The book urged the CCI to look at savings bank interest rate cartelisation. The CCI has responded by asking banks to look into the matter.
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