New Delhi, Oct 2: Finance Minister Nirmala Sitharaman has lauded the meteoric rise in credit driven consumption in small cities and towns, calling it a “revolutionary shift” that has been made possible due to the Pradhan Mantri Jan Dhan Yojana (PMJDY). A definitive surge has been reported in household consumption in tier 2, 3 and 4 cities and even beyond, evidenced by the sales growth of two-wheelers, ACs, refrigerators, smartphones and FMCGs in small towns and cities.
According to FM Sitharaman, “Rural India is no longer a passive observer of India’s growth, it is an active driver of it”. The Finance Minister said that under the PMJDY, which recently celebrated its 10th anniversary, over 53 crore bank accounts have been opened, bringing millions of rural Indians into the formal financial system for the first time.
With more than 80 per cent of Indian adults now holding formal financial accounts, up from a mere 50 per cent in 2011, PM Modi has spearheaded the most transformative financial inclusion drive in modern Indian history, she noted.
Reports mention that 62 per cent of two-wheeler purchases in rural India are now driven by credit, crossing urban figures at 58 per cent. There has been a noticeable growth in electronics and smartphone sales too. According to the industry, various consumer financing options have made this stupendous growth possible.
According to the government, these bank accounts have garnered a deposit balance of Rs 2.3 lakh crore and resulted in the issuance of over 36 crore free-of-cost RuPay cards, which also provide for a Rs 2 lakh accident insurance cover. The total number of PMJDY accounts has risen from 14.7 crore with deposits of Rs 15,670 crore in March 2015 to 53 crore with a total balance of Rs 2.31 lakh crore. The rise in both account numbers and deposits underscores the scheme's role in driving financial inclusion and economic empowerment.
According to FM Sitharaman, India’s rural population was abandoned by a system that "paid lip service to financial inclusion", and even blocked expansion of such credit access to the poor. "It took the decisive leadership of Prime Minister Narendra Modi to bring the rural poor into the financial system and unlock their potential. The opposition blocked progress while PM Modi empowered rural India with pro-poor reforms and welfare policies,” she mentioned.
The RBI said recently that household consumption is poised to grow faster in the second quarter of the current fiscal (FY25) as headline inflation eases, “with a revival of rural demand already taking hold”.
