Is Jan Dhan money actually reaching people?

A rapid assessment survey highlights last-mile glitches in the distribution of government cash transfers during the lockdown.
2020-05-06 00:00:00 India Development Review Is Jan Dhan money actually reaching people?
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Soon after the nationwide lockdown was enforced due to COVID-19, Finance Minister Nirmala Sitharaman announced that all account holders under the Pradhan Mantri Jan Dhan Yojana (PMJDY) (also known as Jan Dhan account, or JD account) would receive cash transfers of INR 500 every month, for three months. It was reported that in April, more than 20 crore accounts had received the transfer. This month, the disbursal for the second instalment started on May 4th and will be staggered over five days to avoid overcrowding at banks.

However, there have also been reports of problems in accessing the money, especially in remote areas. To get more clarity about the situation on the ground regarding cash transfers to JD accounts and withdrawal by account holders, the Rapid Community Response to COVID-19 (RCRC) coalition conducted a rapid assessment survey.

Initially piloted by Ibtada in Alwar, Rajasthan, the survey was expanded to 50 districts across eight states (Andhra Pradesh, Bihar, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan), with a total of 10,992 women JD account holders. The social composition of the respondents was as follows:

Social composition of the respondents

Source: Rapid Community Response to COVID-19

Related article: Does NREGA work for women?

Here are the highlights from the survey:

Most Jan Dhan accounts have received the cash transfer

Nearly 90 percent of the respondents had an active JD account, five percent did not, and the remaining were unaware of the status of their JD accounts. Notably, even in some remote parts of the country, such as in the tribal districts of Odisha, 90 percent of the JD accounts were operational. Of the eight states surveyed, Maharashtra had the least proportion of active accounts, at about 50 percent.

Of those who had active JD accounts, 66 percent said they had received the cash transfer of INR 500 in their accounts.

Was INR 500 deposited in your Jan Dhan account

Source: Rapid Community Response to COVID-19

The proportion of respondents who received the transfer was highest in Odisha and Gujarat, and lowest in Karnataka and Andhra Pradesh.

Most people were informed of the credit to their accounts via mobile phones

Forty-one percent of the respondents said that they knew they had received the cash transfer in their account through an SMS on their phones. Other prominent ways that the respondents got this information was through e-Mitras, visits to e-service centres, and visits to banks.

How were you informed?

Source: Rapid Community Response to COVID-19

Responses to this question saw significant disparities among the eight states. For instance, in Andhra Pradesh, more than 50 percent of the respondents received this information from banking correspondents, whereas in Odisha, Karnataka, and Maharashtra, the proportion of people getting this information by visiting their banks was higher than the overall average.

State-wise sources of information

Source: Rapid Community Response to COVID-19

Most people who received the money have already withdrawn it

About 76 percent of the respondents who had received the cash transfer said that they have already withdrawn the amount. The rate of withdrawal also varied among states—in Bihar and Maharashtra, more than 90 percent of the respondents had withdrawn the money, while in Karnataka the number was less than 50 percent.

When asked why they had not withdrawn the money yet, respondents cited a range of reasons. A third of them said that they could not withdraw it because of the lockdown, although the cash transfer was made to help them during the lockdown. Twelve percent of the respondents also said that they had not withdrawn the money because they did not need it at the time.

Why was money not withdrawn

Source: Rapid Community Response to COVID-19

Of the respondents who have withdrawn the money, 45 percent did it through e-Mitras or Bank Mitras, 33 percent of them visited the bank, 19 percent availed of the services of bank correspondents, and only three percent withdrew it from ATMs.

How was money withdrawn

Source: Rapid Community Response to COVID-19

Again, there was disparity among states. No respondents withdrew the money from e-Mitras or Bank Mitras in Karnataka, where the most popular method was visiting the bank. This was also the most common response from Bihar and Gujarat. In Andhra Pradesh, more than 80 percent of the respondents used the services of banking correspondents.

State-wise methods of withdrawal

Source: Rapid Community Response to COVID-19

Given the urgency of the situation and the fact that many Indian families are currently facing the risk of falling into extreme poverty, the loopholes in this relief measure, especially around last-mile delivery, needs to be identified and taken care of pan-India.

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