Delhi. Union Finance Minister Nirmala Sitharaman lauded the tremendous rise in credit-driven consumption in small cities and towns, calling it a ‘revolutionary change’. She said all this has been possible due to the Pradhan Mantri Jan Dhan Yojana (PMJDY). Domestic consumption has registered a decisive growth in tier 2, 3 and 4 cities and even beyond, evidenced by the rise in sales of two-wheelers, ACs, refrigerators, smartphones and FMCG in small cities and towns.
According to Finance Minister Sitharaman, rural India is no longer a passive observer of India’s development, but an active driver of it. More than 53 crore bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), which recently celebrated its 10th anniversary, bringing crores of rural Indians into the formal financial system for the first time.
The Finance Minister said that more than 80 percent of Indian adults now have formal financial accounts, up from only 50 percent in 2011. This is the result of the drive for financial inclusion led by Prime Minister Modi, which has brought about the most significant transformation in modern Indian history. The report mentions that 62 percent of two-wheeler purchases in rural India are now driven by loans, up from 58 percent in urban areas. Sales of electronics and smartphones have also grown tremendously. According to the industry, various consumer financing options have made this spectacular growth possible.
According to the government, deposits of Rs 2.3 lakh crore have been deposited in these bank accounts and this has resulted in the issuance of more than 36 crore free RuPay cards, which also offer an accident insurance cover of Rs 2 lakh. The total number of PMJDY accounts stood at 14.7 crore in March 2015, with deposits of Rs 15,670 crore, which has grown to 53 crore with a total balance of Rs 2.31 lakh crore. The increase in the number of bank accounts and deposits reflects the scheme’s key role in financial inclusion and economic empowerment.
According to Finance Minister Sitharaman, India’s rural population was previously left out by a system that talked about “financial inclusion” but actually created barriers to expanding credit access to the poor. Prime Minister Narendra Modi’s decisive leadership has played a key role in bringing the rural poor into the financial system and realising their potential. Prime Minister Modi has implemented several pro-poor reforms and welfare policies to empower rural India, while the opposition blocked progress.
RBI recently said that domestic consumption is expected to grow sharply in the second quarter of the current financial year (FY25), as core inflation is moderating and rural demand is already improving.
