JAM Trinity : Jan Dhan Aadhar and Mobile

What is JAM Trinity?

  • JAM Trinity stands for Jan Dhan, Aadhaar, Mobile. 
  • JAM Trinity refers to the consolidation of Prime Minister Jan Dhan Yojana (PMJDY), Aadhaar and Mobile connectivity (JAM). 
  • It is an initiative of Indian Government to link Jan Dhan accounts, Mobile numbers and Aadhaar cards of Indians to avoid the leakages of government subsidies. 
  • It is one of the biggest reforms regarding direct subsidy transfer in terms of cash. 
  • It can effectively solve the problems of corruption and lack of transparency in government subsidy programme. 
  • Aadhaar will help in biometric identification of citizens with accuracy, Jan Dhan accounts and mobile numbers will help the direct transfer of cash in the accounts. It will help to make Indian subsidy programme corruption free. 
  • Cash transfer through JAM can improve the financial condition of poor people in India, and can reduce leakages. 
  • Implementing Direct Benefit Transfer(DBT) in real time through JAM remains one of the government's key objectives, and significant progress has been made in past years in this direction. 

Inefficiency of Current System of Delivering Subsidies

  • In the current system, sometimes a rich household benefit more than a poor household. 
  • Many times, by simply selling goods below actual cost, the government ends up delivering unintended benefits to the rich. 
  • It is difficult to find true beneficiaries. 
  • The government needs accurate databases of eligible individuals for subsidies. Beneficiary databases have existed for long before, but they have errors due to administrative and political discretion involved in granting identity proofs like BPL Cards. 

Why the government should use JAM for its Subsidy Programme?

  • JAM can improve by reducing delays, leakages, and administrative burden. 
  • Till April 2016, Government's estimates show about Rs.17,000 crore of subsidy has been saved on cooking gas alone by Direct Benefit Transfer using Adhaar. Parliament has now approved the bill granting statutory status to Aadhaar which will further accelerate Aadhaar seeding in bank accounts. It is a good example of how government can use JAM efficiently in its subsidy programme. 
  • MGNREGS is one of the government’s largest schemes and forms 41 per cent of DBT expenditure. But it has many problems. 
  • In MGNREGS; there are problems of leakages, Misallocation of funds and sometimes scheme managers spend valuable time haggling with officials at higher administrative units, who often demand arbitrary documentation to release funds. This creates a huge problem for poor beneficiaries. But with JAM Trinity we can easily counter all these problems. 

Challenges of Implementing JAM Trinity

  • According to Economic Survey 2015-2016, in rural areas the level of preparedness for implementation of the JAM Trinity for effective delivery of the government's subsidy programme is low. 
  • The survey stressed the need for improving the business correspondent (BC) network to ensure that the exclusion risk is satisfactorily addressed. 
  • In India, poor and uneducated customers are quite unfamiliar with opening and operating bank accounts and they are rarely seen as clients. 
  • Bank staff are reluctant to cooperate in opening accounts, especially unprofitable ‘zero balance’ accounts, for poor customers. These zero balance accounts are the backbone of DBT and JAM Trinity. 
  • But post offices and the newly-licensed payment banks can play a big role towards this end.
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