JANDHAN AADHAR MOBILE(JAM) ANDGOVERNANCE

Submitted to

Dr. Venkatraja BAssistant Professor -Economics

SDMIMD, Mysore

Submitted by Group 9, Sec C

Ashmi Prasan (16129)

Manash Jyoti Gogoi (16141)

Pillutla Pooja Kusuma (16151)

Saurabh Kumar Ravi (16163)

Syeda Umme Saniya (16173)

ContentsIntroduction...........................................................................................................................................2

Objective from macroeconomic prospect.............................................................................................3

JAM Trinity.........................................................................................................................................3

Jan Dhan Yojana- A revolutionary Financial Inclusion program.........................................................3

AADHAR-Aam Admi ka Adhikar.........................................................................................................4

Use of Aadhar in beneficiary identification....................................................................................5

Use of Aadhar in the verification of Beneficiary presence.............................................................5

Use of Aadhar in Financial inclusion and electronic payments......................................................6

Use of Aadhar card as KYC.............................................................................................................6

Mobile...............................................................................................................................................6

JAM Trinity and Governance.................................................................................................................7

Direct Benefit Transfer:.....................................................................................................................7

JAM to plug in leakages:....................................................................................................................7

Loan benefit.......................................................................................................................................8

Mobile Banking and post office as rural bank....................................................................................8

Insurance Benefits.............................................................................................................................8

Reduction of Fiscal Deficit, increase rating via credit rating agencies and hence increase in investment.........................................................................................................................................9

Issues, Challenges (Spreading JAM across India's economy)...............................................................10

1. The First Mile Challenge: Government → Beneficiary: the challenge of identification................10

2. The Middle Mile Challenge: Government → Bank: the challenge of Payment............................10

3.Bank → Beneficiary: the last-mile challenge of getting money into people’s hands....................11

Affects of JAM Trinity on the current Public Distribution System?......................................................11

Arguments for..................................................................................................................................11

Arguments against...........................................................................................................................12

Conclusion...........................................................................................................................................15

References...........................................................................................................................................16

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Introduction

Jandhan Aadhaar Mobile serves as the basis for the upcoming initiatives and this is going to give maximum returns for every rupee spent. This also creates maximum empowerment among the poor thereby making them eligible to all the benefits which are involved in the economic progress and development of the country and in order to do this the government is depending on 3 major sources and they are the Jandhan Yojana, Aadhaar number and the mobile number and with this initiative the usage of technology is also going to increase among people and they are going to be educated and informed about all the benefits. Jandhan Aadhaar Mobile is also termed as “game changing reform” as it holds the key to the major initiative that is taken up in the country that is direct subsidy transfers. In spite of many schemes being implemented, the poor are still not able to receive the benefits which they are supposed to receive and to ensure that this scheme also does not turn out to be one of such schemes the government is taking some corrective measures by linking the mobile number to the Aadhaar number and bank account. The main and the primary step that is to be taken in this scheme is to remove all the intermediaries so that it can be made sure that all the benefits are being delivered to the poor and for this to happen the government uses the Aadhaar number for helping in the biometric identification of poor people and the Jandhan bank account and the mobile and Aadhaar numbers helps in directly transferring funds into their respective accounts and for doing this an individual’s Aadhaar number is linked to an active bank account. The total number of Jandhan Bank accounts is 125.5 million and the mobile phones is 904 million and 17,757 million Aadhaar numbers. Government has already linked up to 100 million bank accounts so far and this is a major step for helping the Jandhan Aadhaar Yojana target and transfer the benefits to the deserving people. After the identification of the Aadhaar numbers is done the transfers are made on a periodic basis. After the launch of this scheme the total number of bank accounts 19.72 crores and deposits of more than 28,699 crores and more than 1.26 lakhs bank mitras who are the agents representing the banks where the branches cannot be opened were deployed and 13012 mega financial camps were organised for educating the poor about the facilities and benefits that are being made available for them and approximately about 12.24 crore people were included under the social security cover and many more have availed over draft facility and insurance cover has been given to many people. There were many great challenges involved in this and one major challenge is the behavioural challenge as people are not habituated to the usage of the bank accounts and mobile transfer of benefits. This is a great initiative towards the prevention of corruption

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Objective from macroeconomic prospect To contribute hugely toward cashless economy. To leak-proof the public distribution network and hence to decrease the fiscal deficit. To boost GDP in long run by giving all the legitimate benefits to rightful & needy

people and improving the economic lives of them.

JAM TrinityJAM trinity is the combination of three critical pillars to revolutionize the Indian economy. By connecting Pradhan Matri Jandhan Account with the Aadhaar numbers and Mobile Numbers of individuals, the Governments aims at “Wiping Every Tear from Every Eye” by making sure that all the benefits are passed directly to the common person’s bank account through a systematic process. 25.82 crore bank accounts are opened so far, over 100 core people have an Aadhaar number. Around 90 crore mobile numbers are linked with Aadhaar. So far an estimate of 17000 crore of subsidy has been saved on cooking gas alone.

Jan Dhan Yojana- A revolutionary Financial Inclusion programIt is one of the greatest, ambitious and most successful initiative taken by government in 15 th

August, 2014 to provide financial services by bringing every household to the banking system and to facilitate all the banking facilities as well as bring them under a leak-proof roof to deliver the welfare schemes like direct benefit transfer of subsidies, pension, insurance, credit, wages etc. to the excluded sections i.e. weaker sections and low income groups. It would help to give the benefits to the needy people and to empower the weaker section of society. Census 2011 estimated that only 58.7% of households have access to banking services. For a country like India it is very challenging to implement this kind of inclusion successfully because of difficulty to open bank branches having brick mortar to every corner of the country. So government has taken some other routes like Sub Service Areas (SSA), Bank Mitr (Business Correspondent) to cover the entire country. Under the SSA plan, all the six lakh villages of the entire country are mapped according to service area of each bank to have at least one banking outlet serving to 1000 to 1500 households, called Sub Service Area. Lead district manager assigned the banks under the district to different SSAs. Bank has to open a branch or allot a Business correspondent which will act as a banking outlet on their assigned SSAs to serve the banking facilities. Fixed point Bank Mitr (Business Correspondent) are acted as representatives of Bank to provide basic banking services i.e. opening of bank accounts, cash deposit, and cash withdrawal, transfer of funds, balance enquiries and mini statement facility. Basically Bank Mitr outlets are operated in Panchayat office, bus stand, local market etc.

Now the 2nd step is to make the people involved in this system. Govt. made mandatory to have bank account through PAHAL scheme to book LPG cylinder and avail subsidy benefit through direct benefit transfer.

Govt. has also made the process of opening bank account very simple and many features are added to the PMJDY scheme. Feature of the bank accounts opened under PMJDY scheme-

No minimum balance is required.

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Every individual will get RuPay card with inbuilt accidental insurance of Rs 1 lakh. These all are free of cost.

All the government welfare benefits like pension, insurance, MNREGA wages, subsidies would be directly linked to the bank accounts of beneficiary.

After successful continuation of the account for 6 months, one individual in a household will get overdraft facility up to 5000.

Since implementation it has been acting as a vital part to give a new direction to the economy. It is taking care of the objectives in two wings effectively-

One wing is involved in the banking functions i.e. opening of a bank account, connecting the account with RuPay card with integrated accidental insurance of 1 lakh and other schemes like pension, insurance for the upliftment of the lives of the under-privileged people by covering everything under one umbrella and making it as simple & hassle-free as possible.

The other wing is accountable for automating the payments such as direct benefit transfer of different welfare & subsidy schemes by directly linking to the Jan-Dhan bank account.

AADHAR-Aam Admi ka Adhikar

Aadhaar program has been launched in 2009 with a primary objective to give universal & unique identity to every resident Indian. Aadhaar is a 12 digit unique identity number for an individual entailing biometric details and address issued by Union Identification Authority of India which is further linked to individual bank accounts to help unique identification of beneficiaries and address the issue of leakages. There is no age restriction for getting Aadhar.Government made it mandatory to link Aadhaar with bank account to get LPG subsidy benefit. The government claims to save around Rs 15,000 crore in FY 14-15 only by removing fake and duplicate LPG connections which were highlighted while linking Aadhaar number to deliver the benefits. Public Distribution System is another scheme to be enrolled under Aadhaar to plug the leakages. Government is also planning to link Aadhaar for

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distributing Direct Benefit transfer for Kerosene and Fertilizer in future. The institutions such as RBI, TRAI, SEBI and several state governments advocate the use of Aadhaar.

A noteworthy obstacle is that to make the Aadhaar number all inclusive, the administration needs to make it obligatory for profiting DBT benefits and other payments. At present the voluntary use of Aadhaar is allowed for PMJDY bank account.

The value of Aadhaar has been drastically increased over the years due to willingness and initiative taken by Modi government. Recently Supreme Court has made it mandatory for

Public Distribution system For getting the benefits of LPG subsidy scheme

Use of Aadhaar in beneficiary identificationMajority of welfare programs use physical identity and the process is done manually. It creates the following issues-

• Poor with lack of identity are not able to avail the benefits like subsidised kerosene, rice, wheat etc.

• Many people take the benefits by showing fake or duplicated identities.

• There is chance of getting multiple benefits by the same person though he is actually entitled to one benefit only.

These issues can be addressed by Pre-linking the Aadhaar of rightful beneficiary with the welfare program database. In the time of delivery of service the individual can authenticate his proof as the beneficiary by giving the Aadhaar number or biometric method like fingerprint. The applicant name, address and date of birth provided in the application may also be verified against Aadhaar record with UIDAI through demographic authentication. As part of beneficiary approval step, the applicant’s Aadhaar number is matched against existing beneficiaries to ensure that the applicant is not an existing beneficiary. Matching the applicant against national level beneficiary database will help to remove all the duplicates at national level.

Use of Aadhaar in the verification of Beneficiary presence Many schemes require the approval of beneficiary existence.e.g. Pensions, is person getting LPG subsidy indeed the intended beneficiary, in MNREGA program the presence of beneficiary in work site etc.Biometric based Aadhaar authentication can be leveraged to achieve this verification for all scenarios as it confirms the presence and existence of the person. Based on the program requirement, Aadhaar authentication can be implemented at the time of service delivery (e.g. TDPS), work site (e.g. NREGS) or beneficiary can be asked to come to a designated location for authentication at regular interval. The proposed intervention eliminates fraudulent transactions and incorrect reporting of the work done. In addition for programs like pension, it ensures that benefits are not siphoned by others in the event of beneficiary’s death. In programs like NREGS; implementation of beneficiary authentication at work site along with

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direct payments to Aadhaar linked accounts will allow the intended beneficiaries to receive full benefits as per the work done by them.

Use of Aadhaar in Financial inclusion and electronic paymentsTo make the process of cash transfer schemes govt. is linking Aadhaar to bank accounts. Direct Cash transfer schemes like pension, scholarship, is taking place by electronic transfer of payments into Aadhaar linked accounts. Use of Aadhaar linked bank account for direct payment coupled with linking of beneficiary with Aadhaar number ensures that payment is not transferred to a non-beneficiary account or taken away by any intermediary. Beneficiaries receive the full benefits without any delay to their account. In addition Aadhaar-enabled account can be used by resident to receive multiple welfare payments direct payment to Aadhaar linked bank account will result in substantial saving of effort, time and cost for government. In addition it will give full traceability, audit, and non-repudiation for fund flow from the government to the beneficiaries. Subsidy based programs can also leverage Aadhaar linked bank accounts to transfer subsidy directly to the beneficiary.It is important that beneficiaries are able to withdraw their money from the Aadhaar linked bank account. People will soon be able to use Aadhaar card to credit & debit money by giving Aadhaar card number and biometric authentication (finger print) in micro atms, PoS, banks etc. Rural areas not having banking facility will get the banking facilities via micro atms run by bank correspondents.

Use of Aadhaar card as KYCAadhaar can be used as KYC (Know Your Customer). This will help the banks to reduce the customer acquisition cost as well as time.India’s Postal Network can also be linked to the Aadhaar-related benefit schemes. According to the Economic Survey Post Offices can seamlessly fit into the Aadhaar linked benefits-transfer architecture by applying for an IFSC code which will allow them to start seeding Aadhaar linked accounts.

MobileIt is a very smart move to integrate mobile with Aadhaar and Jan Dhan account. Now the process will become more fluidic get an extra edge in the success. By inclusion mobile number to this trinity, bank will be able to offer mobile banking to the users via National Unified USSD platform (NUUP) for non-smart GSM phones. In this system, can get access to facilities like fund transfer, balance inquiry by dialling *99# .Moreover payment banks are coming into picture. Payment banks like paytm, fino pay tech are offering micro-atm services to rural people through business correspondent.

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JAM Trinity and Governance

Through JAM, govt. will be able to do better governance by removing mediatory, bringing all the people into a central database, making all the transaction from government digitalised, make India purely cashless, cover every transaction record under the eye of government and hence reduce tax evasion, make successful every scheme taken by government and to reach each & every benefits to the needy people.

This trinity will hugely contribute to the prosperity and growth of our economy. According to Mahatma Gandhi’s philosophy, the main key to develop a country is to concentrate on empowerment and development of the rural part of a country which automatically push the entire economy towards growth & development. This government is following the same philosophy.  According to an Economic Survey, about Rs.3.78 lakh crores or 4.2 per cent of GDP, was s spent on key subsidies, out of which major part of this is enjoyed by non-poor segment of the country. Moreover there is a big failure in the distribution of subsidized products. The needy people were deprived of the subsidized products. These are the reasons why rich are becoming rich and poor are becoming poor. To counter these issues govt. took this challenging initiative. In just over a year, 19.72 crore bank accounts were opened. So far, 16.8 crore RuPay cards have been issued. There have been deposits worth Rs 28699.65 crores. A record 1, 25,697 Bank Mitras (Bank Correspondents) have also been deployed. It also set the Guinness World Record for most bank accounts opened in one week -1,80,96,130. Most of the rural people were not having any insurance. But now a huge portion of rural India comes under insurance, pension etc. There were many scams under MGNREGA scheme due to loopholes. Now JAM trinity is taking care of corruption less system in these kind of welfare schemes.

Direct Benefit Transfer:

JAM ensures that the transfer benefits reach the common people in cashless and more transparent manner by transferring the funds directly to the customers’ bank account. Benefits like LPG subsidy, pension schemes can be transferred directly to their bank account. By the introduction of JAM government can ensure whether the product reach the deserving household and the goods or services are availed by the right people.

JAM to plug in leakages:

We often see poor people waiting in front of fair price shops for subsidized products but worst phase of this is after waiting so long what they hear is out of stock, they are not provided with what they deserve. Products like LPG, kerosene, diesel, rice etc. are subsidized in India for the poor people. By implementing JAM government can make sure that the services and goods reach to the intended people by tracking through their accounts since all the benefits are transferred directly to the accounts and they can access it through the different public distribution systems.

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Loan benefit

This scheme mainly aims at people in economically backward society, mostly people in rural areas and unorganised sector of semi-urban and urban areas. As per the scheme if the Jan Dhan account completes 6 months the person is eligible to avail loans up to Rs.5000.Even though the loan amount when compared with the other banks is not large amount but it’s quite worthy when we consider the people aimed by this scheme for the upliftment.

Mobile Banking and post office as rural bank

Although various public and private banks provide banking facilities to customers, by this scheme it aims in making possible for doing financial transactions even using ordinary phone via NUUP platform. Since this scheme mainly focus on people in rural sector this will be helpful for them for convenient and fast banking. The main motive behind this scheme is to provide financial security to as many Indians as possible.

The mechanism of direct cash transfer is supported by the mobile money of 900 million cell phone users. Last mile connectivity can be achieved because as compared to bank accounts mobile users are more and at a rate of 2 million every month it’s increasing. There is a huge rise in the mobile operators applying for payment banks which facilitates transfer based on Aadhaar. Connectivity can be achieved in geographically isolated areas through Post Office networks. B using the IFSC code post offices can facilitate the accounts linking to Aadhaar.

Insurance Benefits

Through this scheme those people who could not afford insurance of their own they got an opportunity to avail it. Life cover of Rs.30000 for the customers who meet terms and conditions of the scheme. And also offers Rs.200000 as insurance sum for death due to accident.

Other than these benefits this scheme also offers some macro level benefits for progress of entire nation:

Around 12.5 crore people has started bank account within 100 days of launch of the scheme.

Savings account for each family so that they can manage their savings. Along with the Jan Dhan bank account the customers are given RuPay debit card so

that they can easily withdraw money from ATMs. Along with this account the customers are provided with a kit consisting of account

passbook, cheque book and financial literacy guide. It’s not necessary to maintain minimum balance since it is a zero balance account.

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Since this scheme is linked with Aadhaar card, the verification of the account is done effectively.

The major advantage of this scheme is for farmers. Because they depend more on local money lenders who doesn’t keep any formal financial process and the farmers who are dependent on them will be victims. By this scheme it will reduce the dependency of farmers on local money lenders.

A major problem faced by the country is inefficient distribution of subsidy which in turn cause wastage of money that can be used for developmental activities. Some cases of inefficient subsidization are:

In case of LPG cylinders subsidies three fourth of that are not given for the deserved whereas it’s used by the richer half of the population.

Even though the corporation water is subsidized still poor population get the water from public taps.

By the introduction of JAM Trinity Government is trying to sort out this problem by giving the subsidies to the deserved. As per this scheme the bank account will be linked with the Aadhaar card so that the people who can maintain a good standard of living without government support can be identified and will have to the pay the full price for the services they are availing. By this leakages for long term will be saved and the taxpayers will have to take less burden.

Reduction of Fiscal Deficit, increase rating via credit rating agencies and hence increase in investment

In the long run revenue receipt from tax will be increased as government is pushing the whole economy towards cashless and going to bring every individual into the banking sector. Also govt. has started to save huge amount of money from the leakage of the system. This will help to improve the credit rating of India. The credibility of India will be improved and hence foreign investment will be increased. This will contribute towards “Make in India” and GDP growth.

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Issues, Challenges (Spreading JAM across India's economy) JAM (Jan Dhan Yojana, Aadhaar and mobile) have made significant progress. Still JAM is facing some challenges. Govt. categorize the issues as first mile, middle mile and last mile challenges.

In all the schemes taken by govt., the focus has been mainly on Aadhaar. But point to be noted that Aadhaar is an identity authentication process, not an ‘eligibility for benefits’ identification system. So here the twist comes. It will ensure that a person getting a subsidized product is that person, but it does not validate that whether the person is entitle for the benefit. To deliver the benefits to needy person is becoming a challenge.

1. The First Mile Challenge: Government → Beneficiary: the challenge of identification

The identify beneficiary.

To find out the database of individual beneficiary.

Even though the data was available before Aadhaar through the election ID still there

was no accuracy because the data was hampered by the political discretion and the

beneficiary would be a non-eligible person.

To successfully operate JAM internet as well as mobile network connectivity is

required. Many places still does not have any such kind of connectivity. So, these is

also has to be addressed as soon as possible to cover the entire population.

In 4 states namely Nagaland (48.9), Mizoram (38.0), Meghalaya (2.9), and Assam

(2.4) where less than 50% Aadhaar holders were there.

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2. The Middle Mile Challenge: Government → Bank: the challenge of PaymentAfter identification of beneficiary of govt. has to transfer money to them. This problem has been significantly addressed by PMJDY under which 25.82 crore bank accounts are opened so far. Still the penetration of Jan Dhan account in many areas have not occurred. Govt. have to find out the reasons behind this. One reason might be illiteracy of people, unawareness about the steps taken by government and hence unwillingness to come under banking system.

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3. Bank → Beneficiary: the last-mile challenge of getting money into people’s handsIn a country like India, govt. job is not completed by transferring money to the beneficiaries. It is necessary to ensure that beneficiaries are able to withdraw their money from the bank account as many areas are very far from banking services. Only 27% of the villages have bank within 5 kilometres. Business correspondent density has to be increased and a standard benchmark of BC: population ratio has to be defined.

Effects of JAM Trinity on the current Public Distribution System

Arguments for Jan Dhan bank account will transfer money, thus broaden his choices regarding quantity

and quality of food basket consumption. Need for elimination of red tapism causing space for middleman and hence diversion of

resources meant for poor. Aadhaar number helps in effective identification of beneficiaries, thus reducing

duplication and exclusion of the needy sections. Jan Dhan Yojana is an important landmark in financial inclusion providing every

individual a bank account thus making cash transfer a possible way.  Mobile integration would promote real time information about government policies and

awareness about their entitlements. Promote e-governance, thus achieving faster and efficient transfer while reducing

corruption and administrative workload. Promote financial inclusion, thus improving savings and boosting rural economy.

Direct benefit transfers by JDY will significantly change the whole face of PDS which empowered the ration shops.

Now market forces would take predominance. It will put women at the centre of decision making as Aadhaar will direct the benefits straight to the women heads of family in various schemes.

Mobile penetration would help in better monitoring of movements of goods. The beneficiaries would be promptly alerted through SMS, automated calls etc. this could save a daily wage earner from skipping his work to stand in long queues.

The use of Aadhaar and Mobile number verification in ration shops could lead to elimination of ghost beneficiaries, a major problem afflicting this system.

It could also lead to reduction in leakages as shipments could be tracked electronically from source to beneficiary.

Computerization in ration shops could also lead to better management and prevent black marketing and hoarding.

JAM could make easier the administration of these shops which till now depend on cumbersome paperwork.

Mobile technology has become ubiquitous. This infra can been exploited to connect everyone to the govt.

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Arguments against 40% of households have no access to banks. Banks have pushed for opening accounts. Hence they have accounts today. But unless

their livelihood issues are resolved, they won’t be able to use these accounts. Direct cash can lead to misuse of money, inflation and diversion causing malnutrition. States like Chhattisgarh, Tamil Nadu have effectively implemented PDS. It may dismantle the existing infrastructure of fair price shops, allowing local traders

charge exorbitant money. Even though menace of ghost beneficiaries can be tackled through JAM but prevalence

of multiple accounts, fake Aadhaar cards would maintain the status quo. Better checks needed. Illiteracy, lack of awareness, manipulation by unscrupulous agents

will keep some poor unaware of jam as they were about PDS. Many areas do not have banking services or ATMs from where DBT benefits can be

utilized. Mobile phone coverage is also yet to reach many locations. Technology Barrier in rural areas. Affects PDS supply Chain There are still several people with no access to JAM, thus the process could be

counterproductive. Even SC has said that Aadhaar though can be utilized it is not mandatory to avail public service or benefits.

Aadhaar card enrolment would leave out many sections of the society like the slum dwellers and migrants which are the most vulnerable sections of the society.

So, PDS reforms like capacity building, computerisation, transparency, etc. and promoting financial literacy and banking penetration would integrate JAM with PDS. This will help achieve food security and meet the Zero Hunger challenge. Thus, JAM will not totally dismantle the PDS but, if properly used, would fill in its gaps and strengthen it.

Now, instead of destroying the concept of PDS, both would go hand in hand for the following reasons:

DBT system suffers from many defects like delay in transferring benefit, lack of bank account etc.

More transparent way of utilizing the PDS thus reducing the pilferage. Jan Dhan accounts can be leveraged to use DBT to the intended beneficiaries and thus

making PDS more effective. Regular updates about the arrival and distribution of stocks at various PDS outlets can

be sent via SMS facilities. It suffers from privacy issue. Instead of destroying the infra of PDS, Information

technology could ensure less leakage in PDS system for better transparency. Online database of ration shops, more point of sales (POS) machines & linking them

with server, like the govt. of Karnataka has started in the state. PDS is completely short of latest infrastructure for storage of food grains, essential

commodities. Hence even JAM cannot rectify such problems.

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Overall, there are still people, tribal residing in many parts of country who are totally dependent on PDS system due to above reasons. So, to ensure their food security & welfare an evolved PDS system benefiting from Digital India is needed.

Though there are certain negatives, JAM which utilizes latest ICT seems to be a way forward in dismantling the PDS.

Lack of proper communication channel or infrastructure to bring people and govt. together on common platform. Digital India can help in bridging it.

Banks have pushed for opening accounts. Hence they have accounts today. But unless their livelihood issues are resolved, they won’t be able to use these accounts.

It is important that we move towards a more granular understanding of programmes such as Jan Dhan and Aadhaar in their utility to India’s transformation. Getting any intervention to scale, without reinforcing efficiency, can jeopardise its future. JAM brings together three fundamentally different interventions — Jan Dhan, Aadhaar, and Mobile (JAM) — to deliver value to the citizens of the country, especially the poor. Potentially, JAM can also serve as the basis for continuous engagement of the beneficiary household with the bank, and even consequently with the government. However, translating that potential requires attention to the underlying comparative advantages of each of the interventions that constitute JAM.

Wide scope

The specifics of each of the triumvirate of programmes are staggering. Under the Jan Dhan programme, by December 2016, some 200 million accounts had been opened, with some ₹28,000 crore ($4.5 billion) spread over 65 per cent of the accounts. Aadhaar, which is the unique number for all residents, has covered 900 million residents and counting. Some 80 million Jan-Dhan accounts have been seeded with Aadhaar numbers, and more are in the process. Mobile phones, too, have become fairly ubiquitous; estimates point to 900 million connections and 500 million subscribers, of which 250 million have some form of internet connection.

Clearly, the potential of this combination of instruments is vast and will be limited only by the failure to build significant bridges that enable their orchestration. While public policy has clearly recognised their potential, the challenge really lies in addressing the complexity that arises from the integration of these very large interventions.

Starting with Jan Dhan, the focus of the programme should be on standardisation of the behaviour of agents, primarily through training and better communication of product and service attributes. Clear norms for customer protection overseen by appropriate organisations need to be matched with innovative supervision that complements a broad regulatory framework that does not drive the cost of compliance high for these transactions.

Demand-side issues

While these assumptions can be fleshed out on the supply side, the more embedded and difficult to appreciate transition is on the demand side. This is because the same financial services affect clients differently because of the following three factors:

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Their experience of having lost money because of complex procedures, principal agent problems, or fraud.

Skill level and understanding of the service and its different components by customers vary given India’s great diversity.

Finally, resources that different firms can capture and its allocation to enhancing service could affect competition in this field. Getting a level playing field for all customers will go a long way in building customer confidence leading to greater engagement with banks.

For Aadhaar to become a widespread idiom of usage, more attention will have to be paid to the customer side. Should we want Aadhaar to succeed we will need to ensure increasing utility, without the fear of misuse by the state. Before we go on to examine its contribution even to transfer of benefits, we need to begin by studying customer experience in relation to recourse mechanisms that are Aadhaar-related.

More specifically, we will need an examination of how many of those receiving benefits have been able to make corrections or have made corrections, should they require a change. A measure of this will be the flexibility that Aadhaar will provide in customers choosing how to receive their benefits. Examples would include the flexibility that customers using Aadhaar and Jan Dhan should get in being able to change their agents, their bank accounts or the way they want to receive benefits.

Finally, getting the mobile to be the channel of use will require much more than robust technology. With nearly 900 million connections and 500 million subscribers, the mobile does offer a unique channel to reach individuals. Most programmes or interventions are focussed on getting information to people for a range of purposes; the most significant of these have been the second-factor authentication in transactions and the bank balance updates that follow transactions taking place within a bank account or a card. While these have been useful to engage with the citizen/client, the question is, will it become the channel also of full-fledged financial transactions and service delivery?

Much of the current debate rests on the optimistic rate of growth of smartphones and its users — at present, some 177 million of them and growing at 20 per cent annually. However, the migration to using the mobile for financial transactions or mobile banking has been much slower and that is what perhaps needs attention. There are two components attending to this debate. First is the technology option and second is the customer protection issue.

Upping the technology side

On the technology side, much more can be done to use the existing SIM-based mobile phone to undertake and assist transactions. The way content is transferred manually on to these phones to enjoy “proxy” internet experience is an existing example. Similarly, efforts to enable transactions have to be made. Individual components of financial transactions already exist — pass books in SMS form for example. Putting these components together is what is required and government has to be more decisive in leading this, rather than leaving it to the market. Secondly, much more effort needs to go into using a range of organisations to spread awareness and undertake supervision of transactions and agents than exist at present. Clearly the banks have limited capability to deliver on awareness and supervision of agents. This

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is a very wide field that requires government intervention if we have to in any way expect financial deepening of these services.

The disruptive potential of the JAM integration is huge. The question is, are we adopting the right approaches in making the cumulative benefit available to citizens, especially the poor? These are overall execution disciplines and not issues of technology. JAM’s success will depend on the right approach.

Conclusion

From analysing of various sources related to JAM trinity, we get well versed that if this plan is implemented successfully then India’s overall growth and development will happen for sure. Every plan & processes can’t be 100% perfect. Though JAM is not an exception, this model has a great potential to make drastic positive changes to the whole country. Government has to work on the drawbacks. For example, now it is not mandatory that Aadhaar has to be linked with all the bank accounts of an individual, this system cannot identify the rightful beneficiaries as there is no process to tag the income level of every individual with the respective Aadhaar etc. Also government has to very strict towards the administration to make the process corruption free. As government has recently taken various appreciable steps. These steps include demonetisation, encouragement of cashless payment by giving discussion on petrol, diesel, ticket booking etc. Through the initiatives like JAM trinity, transforming Aadhaar into a payment tool, licensing payment banks, micro-ATM services, demonetisation, discount in online payments, the picture is pretty clear that government is taking every possible steps to make India cashless economy. So, time will explain itself and we are waiting to see the transformation of traditional India to digital India.

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References(n.d.). Spreading JAM across India's economy. indiabudget.nic.in.

http://www.indianotes.com/Analysis/JAM--Jan-Dhan-Yojana-Aadhaar-Mobile-Numbers-Will-the-idea-stick/193590/3/TE

http://www.aadharcardkendra.org.in/jandhan-aadhar-mobile-trinity-2016-2440/

https://www.bankbazaar.com/saving-schemes/how-is-pradhan-mantri-jan-dhan-yojana-beneficial.html

http://www.business-standard.com/budget/article/jam-trinity-fertiliser-subsidies-within-government-transfers-fit-for-dbt-116022700022_1.html

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