6/24/13 Mrunal [Economy] Urban Financial Inclusion : New Directive of the Government to cut Subsidy leakage Print

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[Economy] Urban Financial Inclusion : New Directive of the Governmentto cut Subsidy leakage

Not an article, just some fodder.

1. Urban financial inclusion2. Rural Financial Inclusion3. Why does Government want Bank accounts for Poors?

Urban financial inclusion

Government has launched the campaign for Urban Financial InclusionUnion finance ministry >> The department of financial services.This department, has directed all banks to do following1. open at least one bank account for every family in urban areas living belowpoverty line in urban areas.2. capture biometric information for all such account holders.The responsibility of enrolling families would lie on the bank branch in everyward or circle of a municipal corporation.In case there is no bank branch in a particular ward or circle, the responsibilitywould be given to the neighbouring bank branch.

Rural Financial Inclusion

Earlier, the same department had directed banks to open at least one bankaccount for every family living in financial inclusion villages.Why? = To directly transfer MNREGA wages, Widow Pension etc. into thebank account.

Why does Government want Bank accounts for Poors?

Government wants to cut down leakage of subsidies and limit the totalsubsidy burden at 2 per cent of the GDP. (because if lot of crooks are eatingaway MNREGA / Pensions etc. in half way, then subsidy bill will be high. Soto prevent the crooks, money must be directly sent to bank accounts of PoorPeople.)Therefore in last few months, Finance ministry has undertaken pilot studiesfor direct transfer of fertiliser, kerosene and LPG subsidies.In the Union Budget 2012-13, Pranab had also announced that the Aadharplatformwould be used to support the payments made under

MGNREGA,old age, widow and disability pensions;

6/24/13 Mrunal [Economy] Urban Financial Inclusion : New Directive of the Government to cut Subsidy leakage Print

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scholarships directly to the beneficiary accounts in selected areas.

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Posted By On 04/08/2012 @ 16:03 In the category Economy