Money9 Edit | Jan Dhan scheme: Government can take a leaf out of EPFO’s book

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One of the monumental essays of the last century by a British philosopher praised idleness. But when it comes to money, no work is hard enough. The money accumulated in the Jan Dhan accounts just might be one of the funds that are not working hard enough.

According to the latest data, there are 42.05 crore Jan Dhan accounts in which a total amount of Rs 1.41 lakh crore has been deposited. The amount is huge and exceeds the Union agriculture budget for 2021-22 by 1.14 times.

The Pradhan Mantri Jan-Dhan Yojana was launched on August 28, 2014 with the intention of covering those who were out of the banking system. Two other intentions were equally laudable – ensuring direct cash benefit schemes reached the intended targets without any leakage in the system and empowering women. In fact, as many as 23.30 crore, or 55.41%, of the total 42.05 crore account holders are women.

People seem to have participated enthusiastically. The average deposit per account has grown steadily – Rs 1,279 in August 2015, Rs 1,747 in August 2016, Rs 2,187 in August 2017, Rs 2,521 in August 2018, Rs 2,783 in August 2019 and to Rs 3,239 in August 2020, a COVID-hit year.

The question that looks pertinent at this stage is, is the money deposited in these accounts working hard enough? There is no data to suggest that it is.

Perhaps, Employees Provident Fund Organisation (EPFO) holds out a lesson for the government to ponder over. In order to make its funds sweat more, EPFO invests 15% of its incremental flows in the exchange traded funds.

Despite early apprehensions from different quarters, the safety of the funds of EPFO has not been compromised as a result. Perhaps, the government can think of a similar mechanism to earn better returns from the Jan Dhan cash. A better return might also give higher interest to the account holders.