DMPQ- . What is the concept of JAM ? Point out it’s significance in the modernization of Indian economy.

Large-scale, technology-enabled, real-time Direct Benefit Transfers can improve the  economic lives of India’s poor, and the JAM Trinity (Jan Dhan, Aadhaar, Mobile) can  help the government implement them. Over the past year, JAM has deepened its coverage  at an astonishing rate creating around 4 million accounts per week and several mobile  money operators were licensed. Cash transfers can directly improve the economic lives  of India’s poor, and raise economic efficiency by reducing leakages and market distortions.  Implementing Direct Benefit Transfers (DBT) at large-scale and in real-time remains one  of the government’s key objectives, and significant progress has been made in the past year.

Ingredients of JAM

The essential components for JAM are listed below:

Government —» Beneficiary

The challenge of identification: To identify the  beneficiaries, the government needs databases of eligible individuals. Beneficiary  databases have existed for long before Aadhaar, but their accuracy and legitimacy  have been hampered by the administrative and political discretion involved in  granting identity proofs like BPL cards, driving licenses and voter IDs. Ghost and  duplicate names crept into beneficiary lists, leading to leakage.

Government —> Bank

the challenge of payment: After identifying beneficiaries, the government must transfer money to them, for  which the government needs their account numbers. This constraint has been  eased by the Pradhan Mantri Jan Dhan Yojana, under which 120 million accounts  were created in the last year alone at a blistering, record-setting pace of over 3 lakh  accounts per day. Despite Jan Dhan’s record-breaking feats, basic savings account  penetration in most states is still relatively.

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