JAM Trinity: Jan Dhan-Aadhar-Mobile

The NDA government was instrumental in bringing about an important reform which was given a catchy abbreviated form, JAM, for Jan Dhan Yojana, Aadhaar, and mobile number. The reform was to directly transfer subsidy to the beneficiary.

The Pradhan Mantri Jan Dhan Yojana was announced by the prime minister in his Independence Day speech, and it was launched on August 24, 2014. It was one of the largest schemes in the world for financial inclusion, directed towards helping those persons so far without a bank account to open a bank account (without minimum balance requirement), get a debit card, and access to social security schemes like insurance and pension. There is no doubt that the scheme served to bring about a huge increase in bank accounts being opened, and over the years bring in a considerable amount of money into the formal banking system. The first steps of

moving unbanked Indians towards organised finance were thus taken. Criticism that privacy and security are affected need to be addressed, but the advantages of the poor getting access to modern finance cannot be denied.

A tool for identity mapping that was launched by the UPA in January 2009, Aadhaar was strengthened and institutionalised by the new government. The Unique Identification Authority of India was established as a central government agency with the objective of collecting the biometric and demographic data of residents, storing them in a centralised database, and issuing a 12-digit unique identity number called Aadhaar to each resident. Aadhaar was put to use by the NDA government in improving the delivery of services to the citizens. The NDA government managed to get Parliament to enact the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act in March 2016. The Centre began identifying the recipients of the LPG subsidy by insisting that consumers link their gas connections and bank accounts to their Aadhaar.

Though the Supreme Court restricted the use of Aadhaar to welfare schemes in which the people receive benefits from the government, the system brought down wastage and corruption in the transfer of benefits.

Several subsidy schemes that had been designed to ensure a minimum standard of living to the poor took different routes to reach the beneficiary. The Centre and the states supplied rice, wheat, pulses, cooking oil, sugar, and kerosene at heavily subsidised prices through the PDS. Power, fertilisers, and oil were sold below market prices to certain sections of the population. The MGNREGA operated through the panchayats which paid minimum wages to the workers. As these subsidies made their way to the target beneficiary, there were leakages on the way, with corruption and inefficiencies reducing the final amounts. The JAM trinity was intended to reduce the leakages and ensure that the real beneficiaries got their due by doing away with the intermediaries: Aadhaar would help in foolproof identification

of the correct citizens, while Jan Dhan bank accounts and mobile phones would facilitate direct transfers of funds into the targeted person’s accounts. To get the money into people’s hands, greater use of mobile payments technology was to be used. Transfer of money could be quick as well as secure and convenient through use of mobiles. Over time, if leakages are stopped and savings for the government increased, the burden on the taxpayer would go down. Moreover, with lower subsidies and fiscal deficit, India’s international credit standing would improve.