Finance Minister Nirmala Sitharaman has hailed the remarkable increase in credit-driven consumption in smaller cities and towns, describing it as a revolutionary shift attributed to the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY).
There has been a significant uptick in household spending in tier 2, 3, and 4 cities, as reflected in the rising sales of essential goods such as two-wheelers, air conditioners, refrigerators, smartphones, and fast-moving consumer goods (FMCGs).
“Rural India is no longer a passive observer of India’s growth, it is an active driver of it,” Sitharaman stated, emphasizing the pivotal role of rural consumers in the national economy.
Celebrating the 10th anniversary of the PMJDY, the Finance Minister highlighted that over 530 million bank accounts have opened, integrating millions of rural Indians into the formal financial system for the first time.
This initiative has led to a remarkable increase in the number of adults with formal financial accounts, rising from 50 percent in 2011 to more than 80 percent today.
Rural Areas Surpass Urban In Two-Wheeler Credit Financing
Reports indicate that rural areas now finance 62 percent of two-wheeler purchases through credit, surpassing urban areas, where the figure is 58 percent.
The surge in sales of electronics and smartphones is also notable, driven by various consumer financing options that have made such purchases more accessible.
The PMJDY accounts have collectively amassed deposits totaling Rs 2.3 lakh crore and have resulted in the distribution of over 360 million RuPay cards, which come with a Rs 2 lakh accident insurance coverage at no cost.
The growth trajectory of PMJDY is evident, with the number of accounts increasing from 147 million with Rs 15,670 crore in deposits in March 2015 to 530 million with a total balance of Rs 2.31 lakh crore today.
This surge in both account numbers and deposits highlights the scheme’s effectiveness in enhancing financial inclusion and empowering the economy.
Sitharaman pointed out that India’s rural population had long been neglected by a system that offered mere lip service to financial inclusion while restricting access to credit for the underprivileged.
She asserted, “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.”
Recent data from the Reserve Bank of India suggests that household consumption is likely to accelerate in the second quarter of the current fiscal year (FY25), bolstered by easing inflation and a revival in rural demand.
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