Since April 1, about 30 million accounts have been opened, with a total increase in deposits of Rs 11,060 crore in these accounts. As per the latest data on October 14, the total number of the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts stood at 410.5 million with a total balance of Rs 1.31 lakh crore.
Only 19 million accounts were added in the year-ago period, while deposits rose by only Rs 7,857 crore. The pandemic hence led to a 60% increase in the opening of new Jan Dhan accounts, according to the report.
“We believe this surge is possibly related to the thrust on digital payments – which require bank account – amid rising fear of infection. The government also credited Rs 500 a month per woman account under Atmanirbhar Bharat package,” said the report.
The data indicates that labour remittances, which started picking up in June and July, crossed the pre-Covid levels in September. “Thus it seems migrant labourers are coming back in adequate numbers to workplaces for livelihood and that too much before Diwali as was largely expected,” said SK Ghosh, group chief economist, SBI group.
Empirical research suggests that PMJDY accounts work as a primary vehicle for labour remittances, apart from increased lending, smoothing consumption and increased spending on healthcare, said the report.
SBI’s economic activity index, indexed at 100 in February, which showed increased momentum in September, continued to improve in October. “Our latest reading is slightly above 90, mainly because of higher RTO revenue collections and higher mobility as indicated by Google workplace mobility,” said the report.
Additionally, during April-August, 2.5 million new Employees’ Provident Fund subscribers joined, of which 1.24 million were first-time payroll entrants. The point of concern though, according to the report, is that the degree of formalisation fell significantly to 6% in 2020-21 from an average of 11% in earlier years. “The increase in remittance though is in perfect coordination with increase in payroll. The jump in payroll leads to higher remittances,” said Ghosh.