Financial Inclusion of Youth - Steps in Budget 2015

Financial Inclusion of Youth - Steps in Budget 2015

Question - Prime Minister Narendra Modi recently attended the RBI conference on financial inclusion. Discuss the steps which have been taken by the Budget 2015 to address financial inclusion for the youth in India.

Budget 2015 has several programmes, schemes and projects for ensuring financial inclusion of the nation’s young population.

• Programmes such as Skill India and Make in India are aiming at promoting the entrepreneurial spirit and supporting fresh start-ups

Mudra Bank

• MUDRA/Micro Units Development Refinance Agency with a corpus of INR 20,000 crore and credit guarantee corpus of INR 3,000 crore has been formulated as per Budget 2015 for helping informal sector enterprises to gain access to financing

• Close to 5.77 crore small business units run small manufacturing, trading or services business and find it hard to access formal financial aid; MUDRA bank will address this issue

• MUDRA Bank will replace Micro Finance Institutions through the Pradhan Mantri Mudra Yojana and provide financial aid for first generation entrepreneurs as well as young and skilled workers

• Budget 2015 aims at funding the un-funded and banking the un-banked

• MUDRA Bank aims to be the Last Mile Financier and regulate micro/small enterprise financing business

• The bank will also run a credit guarantee scheme for loans being provided to micro-enterprises

Pradhan Mantri Jan Dhan Yojana

• Pradhan Mantri Jan Dhan Yojana, the biggest initiative for financial inclusion in the world was also launched by Budget 2015

• This scheme has outdone the original target of opening bank accounts for 7.5 crore uncovered households in the nation by 26th January 2015

• Around 11.50 crore accounts were opened by 17th January 2015

• Of the accounts which were opened, a majority (60%) were in the rural areas; female account holders amounted to 51%

• Rupay cards have been issued to higher than 10 crore beneficiaries who will obtain the advantage of personal accidental insurance of INR 1 lakh under the Yojana. Additionally, there will be a life insurance cover of INR 30,000 for eligible beneficiaries

• Universal social security system will also be launched especially for poor weaker sections of society through the Pradhan Mantri Suraksha Bima Yojana

• This covers accidental death risk of INR 2 lakh for a premium of just INR 12 per year

• Another social security scheme aimed at financial inclusion released in the Budget 2015 was the Pradhan Mantri Jeevan Jyoti Bima Yojana covering natural and accidental death risk of INR 2 lakhs

• For the welfare and financial inclusion of young women in India, the Sukanya Samruddhi Yojana has been proposed

• This scheme is also for the welfare of SC and ST youth

• An integrated livelihood and education scheme known as Nai Manzil is also to be launched as per the Budget for helping minority youth without formal school leaving certificates to obtain one and access more optimal job opportunities

Facts and Stats

• India has close to 54% of the total population below the age of 25 years

• It is one of the youngest nations of the world, yet lower than 5% of the potential workforce obtain formal skill training for employability

• Rural population is close to 70% of the Indian population; financial inclusion of the rural youth is critical for unlocking the potential of India’s demographic dividend

• Year 2022 is the Amrut Mahotsav and the 75th year of Indian Independence