2015InclusionPolicyReforms Must Perform

From The Editor

It has been a busy schedule for the Modi Government in the past six months in terms of policy initiatives and it is going to be even more hectic in the coming quarters when it gets down to implement those policies to revive the economy, generate employment and pull up millions from poverty.

Not all policies have been able to take off from the drawing boards and not all legislative reforms have been able to make much headway. But there has been some major break‑through—launch of Jan Dhan to wipe off financial untouchability and introduction of GST Bill in Parliament to name a few important ones.

While the flagship scheme Jan Dhan made a flying start in end-August and close to 100 million accounts have been opened by end-December, the ground reality is somewhat different. About three-fourth of the Jan Dhan accounts have zero balance or dormant as the poor are still not aware of the benefits and entitlements. As detailed in our special feature, SKOCH Group’s financial literacy programme Samavesh at Pilibhit was an eye-opener on why Jan Dhan is falling short of making a mark in the lives of the poor in villages. While expectations and aspirations are high, Samavesh revealed the poor are facing immense difficulties in opening a bank account—they are apparently asked to furnish documents that they don’t possess and in some cases are even asked to pay money to open a zero-balance account!

While there is a need to thoroughly monitor and evaluate the scheme, Jan Dhan should not go down in history as a mere account opening programme but it should be leveraged to root out poverty. Opening a bank account will serve little purpose for poor households unless the poor are provided training and bank credit for making a livelihood and all the entitlements from the government are paid into these accounts.

The message is same for other initiatives as well—reforms must perform. As the final contours of Make in India, Digital India, Smart Cities and other policy initiatives are taking shape, the government must tread cautiously on various contentious issues. While much of the focus is on manufacturing and infrastructure, it is queer why the services sector that contributes the most to GDP remains out of focus of the present government.

The Budget for 2015-16 will be crucial for carrying out some course correction and providing new direction to the reform process. With state elections throwing up favourable numbers for the ruling BJP, one can hope that much of the disruptions in Parliament will subside in the coming months. Nonetheless, Team Modi should aggressively push reforms including the Bills for coal block auctioning, liberalise insurance, mining and other sectors and relax rules for land acquisition after having issued the Ordinances. With benign inflation, RBI must now aggressively cut rates in 2015 to help revive private investment and spur growth. Without these, many of Modi’s flagship schemes may continue to face hiccups.

Sameer Kochhar

Sameer Kochhar, Chairman of SKOCH Group, is a passionate advocate of social, financial and digital inclusion. In 1997, after spending 15 years in the corporate world, he decided to follow his inner calling and become a development thinker. Ever since, he single-mindedly applied himself to the rigours of self-education, academic research and field tours. The SKOCH Group – which has a think tank, media and consultancy arms – was established as part of this endeavour. His expert opinion is sought by the government. In Kochhar's thinking, writings and activities, his profound admiration for Indiaís economic reforms – and in extension, those outstanding personalities who strive to make these reforms more meaningful and broad-based – comes out clear and unambiguous.
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