Jan Dhan helped people reduce drinking and smoking!
The Pradhan Mantri Jan Dhan Yojana, combined with demonetization, is having surprising but positive consequences: it is apparently motivating villagers to cut down on drinking and smoking! In some states like Bihar, Maharashtra, Rajasthan and West Bengal, there had also been an increase in medical expenditure since October'16. The findings were a result of a study by the SBI's economic research wing.
How did demonetization impact Jan Dhan accounts?
Many of the 30cr+ Jan Dhan accounts were opened post demonetization. Deposits in the existing ones immediately after demonetization saw an abnormal surge. Between Dec'16-Mar'17, the accounts recorded a Rs. 12,000cr decline in net balance due to large withdrawals, then again swelled to 63,971.38cr in April. Just 10 states have 75% accounts: UP (4.cr) tops the list, followed by Bihar (3.2cr) and WB (2.9cr).
How did Jan Dhan impact behavioral changes?
According to researchers, bank accounts have induced villagers to save and reduce spending on intoxicants. "We observed that there is both statistically significant and economically meaningful drop in consumption of intoxicants in states where more PMJDY accounts were opened," the study said. However, scholar Ashok Gulati said "more robust analysis" is needed to confirm the correlation. The research paper will be released later this year.