The government’s ambitious financial inclusion programme is about to get bigger. Last week, Finance Minister Arun Jaitley announced that the target for new bank accounts under the Pradhan Mantri Jan Dhan Yojana had been revised from 7.5 crore to 10 crore by January 26, 2015.

Yet while the government seems to be casting its net wider, it has also quietly made changes to the scheme that narrows down the list of those who qualify for its incentives. Accompanying news that up to 75% of the new bank accounts opened have zero balance, comes word that the perks meant to add people to the banking net, such as a subsidised life insurance cover and overdraft facilities, will not be available to all those who signed up.

The Jan Dhan Yojana was meant to be one of Prime Minister Narendra Modi’s landmark schemes, introduced with the intent of bringing the entire country into the financial network by January 26, 2015. To encourage people to apply for new accounts, the government announced several incentives.

Those perks, however, will no longer go out to everyone. In guidelines sent to banks last week, the government added conditions for those account holders who will be eligible to claim these benefits, according to a report by the business daily Mint.

New guidelines

Here’s a quick guide to how the scheme’s specifics have changed.

Before: Announcing the scheme, the prime minister gave a call for ending “financial untouchability”. The scheme promised free insurance cover, debit card facilities as well as an overdraft facility to all those who signed up for it before January 26, 2015.

Now: Only one person per household will get insurance, if they are aged between 15 and 59, except for:

*those who pay taxes;

*those who don’t have an Aadhar card;

*those who don’t have a working debit card (meaning that it must have been used in the last 45 days);

*those who work for the central or the state government;

*those who work in public sector units;

*those who have availed life insurance as part of the Aam Aadmi Bima Yojana, which was launched in October 2007 as a social security scheme to offer insurance to people from rural landless households.

Alarm Bells

These changes come in the light of alarm bells from the Reserve Bank of India and the finance ministry’s own data, suggesting that a great number of accounts are either duplicate or lying nearly dormant. The central bank had warned in September of these problems, and now it seems like the government has moved to address the issues, particularly the danger of overextending itself on the fiscal front, by limiting those who have access to the insurance scheme.

There are plenty of other stumbling blocks as well. Working debit cards have been made mandatory for claiming the insurance benefit. Here working implies that the debit card must have been swiped once in the last 45 days of claiming insurance but the bigger problem for many is non-issuance of cards.

So far, only 61% of the account holders have been issued debit cards. Hence, over 3.11 crore people are waiting to receive their debit cards, according to data on the Jan Dhan Yojana’s website.

At the same time, one must have the unique identification Aadhar card linked to the bank account in order to avail the insurance cover. The progress on linking Aadhar cards to bank accounts opened under Jan Dhan Yojana has been even slower with over 5.25 crore out of a total of 7.5 crore accounts still pending to be linked to their respective unique identification numbers.

Jaitley, last Thursday, also asked bankers to reduce the number of zero-balance accounts through financial literacy campaigns and floated the idea of integrating the Jan Dhan Yojana with other central and state schemes. In particular, taking the support of Self-Help Groups around the country and linking the scheme with the National Rural Livelihood Mission.