 "Narendra Modi, Modi, Narendra")
While the amount of money in Jan Dhan accounts post demonetisation has started tapering, there has been an unprecedented rise in the number of zero balance accounts during the period.
Jan Dhan accounts data shows that the number of such zero balance accounts between January this year till a day after demonetisation declined by 4 million.
However, over a space of 35 days post demonetisation, 8.5 lakh people were added to the list of zero balance account holders.
The number of people with Jan Dhan accounts also increased by 4.6 million after the Rs 500 and Rs 1000 notes were declared illegal tender.
Economists have suggested that the government has set the stage for transfer of money to zero balance Jan Dhan accounts which belong to the poorest of poor across the country. Figures show that there has been a significant rise in zero balance accounts in states where elections are scheduled early next year.
Uttar Pradesh (UP) for instance saw a rise in zero balance accounts to 9 million. Around the time demonetisation was announced, UP had 8.6 million of such accounts. The number of Jan Dhan account holders during this period also increased by 10 million in the state. The government's intention of pushing more funds to UP is also becoming clearer by the day. RTI data suggests that funding under the Swacch Bharat Mission has been hiked 700% in the state in 2016-17.
In Gujarat too, almost one lakh more zero balance accounts surfaced. This has raised the total number of such account holders in the state to 2 million. Similar trends are visible in other states going to the polls like Uttarakhand, Punjab, Goa and Manipur. There are almost 20 million zero balance Jan Dhan account holders in these states.
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If the Modi government decides to play Robin Hood and go ahead with this bonanza, it will have multiple means of achieving this objective. The government launched the Pradhan Mantri Garib Kalyan Yojana (PMGKY) earlier this month which is a continuation of its Income Declaration Scheme (IDS). Under this, those willing to declare their ill-gotten wealth can pay a 50% tax (including surcharge and penalty) and keep a fourth of the money. The remaining 25% will be put in an interest-free account for four years and given back to the declarant after that. Under the first IDS, the government managed to net Rs 6800 crore by November 30.
The second means through which the government can transfer money to the poorest of the poor is by using money collected in raids and seizures since demonetisation. Reports suggest that the Income Tax department alone has seized close to Rs 3100 crore in unexplained income. High profile raids are revealing more of such illicit wealth in new currency, old notes and gold every single day. Post scrutiny and taxation, the money recovered is likely to be transferred to the fund specifically set up by the government for the welfare of the poor.
Moreover, the government is also closely scrutinising the massive surge in Jan Dhan Dhan accounts since demonetisation. The Central Board of Direct Taxes (CBDT) had issued a warning to all Jan Dhan account holders not to act as fronts for money laundering. Since demonetisation, deposits in such accounts have surged by more than Rs 27000 crore. CBDT officials say that they are closely monitoring account holders and those behind abnormal deposits in thousands of accounts. A failure to account for the money could lead to a complete seizure of unexplained amounts which could run into several thousands of crores. The government’s gain on these three fronts is rising steadily and is likely to peak early next year.
But with zero balance accounts also rising post demonetisation especially in election-bound states, the Modi government would have more mouths to feed than it had originally envisaged.
