Bihar, Odisha, UP score better than Gujarat in providing digital bank accounts to BPL, says Bill Gates' NGO
A high-profile study has found that Gujarat’s just about 13 per cent of people below the poverty line (BPL) have active digital bank accounts, which is the lowest in India. The study, carried out by the Washington-based InterMedia and sponsored by the world’s one of the most prestigious philanthropic organizations, Bill & Melinda Gates Foundation, comes close on the heels of Prime Minister Narendra Modi’s announcement of his ambitious Jan Dhan project, requiring bank accounts to about 10 crore poor of the country by January 26, 2015. The Government of India has claims, 1.5 crore accounts were “opened” in just a day.
Part of the InterMedia’s Financial Inclusion Insights (FII) programme, the study is based on a “qualitative survey” 45,024 Indian adults, ages 15 and older, conducted from October 15, 2013 to January 8, 2014, on access and use of financial services, as well as barriers and potential for future use. As against Gujarat’s 13 per cent BPL having digital accounts, the respective percentage for Tamil Nadu is 32, Himachal Pradesh 32, Maharashtra 28, Kerala 27, Karnataka 24, Andhra Pradesh 23, West Bengal 20, Haryana 20 and Punjab 15.
The survey terms bank accounts as “digital account” in order to identify whether the accounts are active for the digital transfer of money from government to bank account holders, which is what is needed for all cash transfers. The basic premise of Modi’s Jan Dhan programme is cash transfer of all subsidies given under different government schemes to the poorer target groups. This, it is expected, would bring about an end to corrupt practices in providing subsidies to the poor.
What is shocking is, the so-called Bimaru states perform than Gujarat – with Madhya Pradesh 19 per cent of the B PL having digital bank accounts, followed by 17 per cent in Jharkhand, Rajasthan 17 per cent, Chhattisgarh 17 per cent, Bihar 14 per cent, Assam 16 per cent, and Odisha 15 per cent. The study comes close on the heels of top Indian consultants, Crisil, coming up with similar results, rating Gujarat’s performance in financial inclusion worse than the national average on the basis of analysis of penetration of banking services (read HERE).
Worse, the study finds Gujarat has just 45 per cent of adults who “ever accessed a bank account”, which is lower than Kerala (66 per cent), Tamil Nadu (62 per cent), Andhra Pradesh (58 per cent), Himachal Pradesh (57 per cent), Maharashtra (56 per cent), Punjab (54 per cent), Uttarakhand (53 per cent), Uttar Pradesh (51 per cent), Karnataka (49 per cent), and Haryana (48 per cent). One of the major reasons, if the survey results are an indication, appears to be failure to usher in an era of financial inclusion in Gujarat’s rural areas.
Thus, as against 73 per cent of the urban adult population of Gujarat having active bank accounts, the corresponding percentage for the rural areas is just 39 per cent. The report states, “Active bank account use is higher than the national average in India’s megacities such as Mumbai in Maharashtra, Ahmedabad in Gujarat, Bangalore in Karnataka, Kolkata in West Bengal, and Hyderabad in Andhra Pradesh. As a result, active use varies greatly between urban and rural populations in these states. In Gujarat, for instance, urban bank account holders are almost twice as likely as their rural counterparts to use these accounts actively.”
The gap is not as high in other comparable states, the study suggests – in Maharashtra it is 72 per cent in urban areas but 56 per cent in rural areas. For Karnataka the corresponding figures are 72 per cent and 58 per cent, for West Bengal they are 69 per cent and 54 per cent, and for Andhra Pradesh they are 62 per cent and 54 per cent. In fact, the chart attached with the survey suggests that Gujarat’s 19 per cent rural males and 8 per cent rural females have “active digital accounts”, and only Bihar performing worse with 18 per cent rural males.
Thus, as against 73 per cent of the urban adult population of Gujarat having active bank accounts, the corresponding percentage for the rural areas is just 39 per cent. The report states, “Active bank account use is higher than the national average in India’s megacities such as Mumbai in Maharashtra, Ahmedabad in Gujarat, Bangalore in Karnataka, Kolkata in West Bengal, and Hyderabad in Andhra Pradesh. As a result, active use varies greatly between urban and rural populations in these states. In Gujarat, for instance, urban bank account holders are almost twice as likely as their rural counterparts to use these accounts actively.”
The gap is not as high in other comparable states, the study suggests – in Maharashtra it is 72 per cent in urban areas but 56 per cent in rural areas. For Karnataka the corresponding figures are 72 per cent and 58 per cent, for West Bengal they are 69 per cent and 54 per cent, and for Andhra Pradesh they are 62 per cent and 54 per cent. In fact, the chart attached with the survey suggests that Gujarat’s 19 per cent rural males and 8 per cent rural females have “active digital accounts”, and only Bihar performing worse with 18 per cent rural males.
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