Prime Minister Narendra Modi’s ambitious scheme promoting financial inclusion, the Pradhan Mantri Jan Dhan Yojana, has already racked up impressive numbers: more than 1.8 crore people opened bank accounts on August 28. By the next day, 2.14 crore accounts were opened under the scheme to bring hundreds of millions of Indians into the organised financial sector for the first time. Banks are conducting “mega camps” across the country to get people to sign up for basic savings accounts.

“The reason this scheme got such a good response is that unlike previous schemes along the same lines, such as the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Jan Dhan Yojana offers a lot more services and facilities to new account holders,” said Rishi Gupta, executive director and chief operating officer of FINO Paytech, a Navi Mumbai-based Indian financial inclusion solutions and services company. “Also, because it is the prime minister's project, it is being implemented at the grassroots level and has been marketed well.”

Who’s in charge?

The prime minister has appointed a team of four ministers and four Bharatiya Janata Party leaders to oversee the project, a senior party leader told Scroll.

Minister of chemicals and fertilisers Anant Kumar, minister of state for commerce and industry Nirmala Sitharaman, minister of human resource development Smriti Irani, and minister of state for power, coal and new & renewable energy Piyush Goel will be looking at the scheme.

From the party, national general secretary Bhupendra Yadav, general secretary (organisation) Ram Lal Ji, vice-president Mukhtar Abbas Naqvi and national general secretary Jagat Prakash Nadda will oversee things.

Before the scheme was brought to public attention, this eight-member committee held meetings with party workers in various states to explain the scheme to them – over 100 of these informational sessions were organised.

“The major issue in the country has always been that while the government may launch good schemes, at the grassroots level, people have no awareness about them and do not know how to benefit from them”, said Naqvi. “Our party machinery is working in tandem with the government to ensure that the projects are actually benefitting people instead of rotting in files.”

Will it work?

However, some experts question the viability of the scheme. While accounts might be opened, there is a good chance millions of these could lie inoperative for many months of the year, especially if they have been opened by families without a steady source of income, said Himanshu, a professor of rural development at Jawaharlal Nehru University, who uses only one name.

Another expert noted that much of the effectiveness will depend upon the attitude of bank employees and the extent to which they are willing to cooperate, said Hatim Broachwala, a financial research analyst at the Mumbai-based Nirmal Bang Securities. “Most of these new account holders will be uneducated," he noted. "There will be issues with documentation and a lot of them won't have proof of identification.”

In addition, it is still not clear who will be paying the insurance premiums associated with these accounts: the holder or the government. An official at the National Payments Corporation of India revealed that while his colleagues have been meeting with the Ministry of Finance about this, the government has  yet to make an official announcement whether these insurance will be free for the customers or they will have to pay a premium.

According to the business newspaper Mint, Life Insurance Corporation of India has ruled out bearing the costs of the insurance. The Centre is likely to have to pay these premiums, which at Rs 100-150 per person will work out to a total cost of Rs 750 crore-Rs 1,125 crore per year just for the insurance coverage.