Jan Dhan Yojana likely to boost rural spend in 2015-16 - Hindustan Times
close_game
close_game

Jan Dhan Yojana likely to boost rural spend in 2015-16

Hindustan Times | By, New Delhi
Feb 25, 2015 10:55 PM IST

Boosted by the opening of new zero-balance savings accounts under the Pradhan Mantri Jan Dhan Yojana, consumption demand from the rural sector, with about 70% of India’s poulation, is likely to surge in 2015-16.

Boosted by the opening of new zero-balance savings accounts under the Pradhan Mantri Jan Dhan Yojana, consumption demand from the rural sector, with about 70% of India’s poulation, is likely to surge in 2015-16.

Prime-Minister-Narendra-Modi-at-the-launch-of-Pradhan-Mantri-Jan-Dhan-Yojna-at-Vigyan-Bhawan-in-New-Delhi-Mohd-Zakir-HT-Photo
Prime-Minister-Narendra-Modi-at-the-launch-of-Pradhan-Mantri-Jan-Dhan-Yojna-at-Vigyan-Bhawan-in-New-Delhi-Mohd-Zakir-HT-Photo

Account holders under the scheme will not only be eligible for loans after six months, but subsidy amounts from other govt schemes will also be directly transferred to these accounts. This will give a fillip to rural activity and demand, which in turn will help the economy grow.

Hindustan Times - your fastest source for breaking news! Read now.

The government may target a growth rate of 7.8-8% for 2015-16, a senior government official said.

“It (opening of bank accounts) does have the potential to perk up rural activity and demand, and a regular monsoon spell would supplement this. However, overall economic activities would also have to improve,” DK Joshi, chief economic adviser, Crisil, told Hindustan Times.

Over 115 million bank accounts have been opened under the scheme, according to official reports.

According to an internal research by the State Bank of India, these new savings accounts are likely to make rural discretionary spending jump up.

The increase in rural wages in 2014-15 has been slow. This is especially after lower spendings on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by the government, and a narrower increase of the minimum support prices (MSP) of agricultural products. MSP is an intervention by the government to insure agricultural producers against any sharp fall in farm prices. Official sources said the government was watching the sector with a keen eye to fuel the rural economy.

A few years ago, when urban demand remained flat, it was the rural sector which helped in pushing the growth rate.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On