India will use its high growth rate to alleviate poverty and improve quality of life, finance minister Arun Jaitley has said. Addressing the 25th World Congress of Savings and Retail Banks on Thursday, Jaitley said an aspirational society cannot wait indefinitely for the benefits of growth to improve the quality of life of the poor. “Economies like ours all over the world need a high rate of growth. We want to use growth as a mechanism to pull the maximum number of people out of poverty, (and)  improve upon quality of life,” he said.

The FM observed that the penetration effect of growth will certainly take place, but it will be a slow process, and aspirational society is not willing to wait indefinitely. The government is conscious of the fact that there are dangers of deAP velopment and progress benefiting a few and leaving many others out of inclusion system, he said. Jaitley said the objective of the financial inclusion drive of the Narendra Modi government was to bank the unbanked, secure the unsecured, fund the  unfunded, and service the unserviced areas.

Banks, especially public sector banks, opened 330 million accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) in a few months, he said.

“Initially, it was zero balance accounts and gradually people started putting in money. To incentivise operational accounts, an overdraft facility was provided to them,” he said. The minister said India predominately is an uninsured and unpensioned society, and the government offered insurance at very affordable premium as part of the social security system through the PMJDY account. A total of 141 million people are enrolled under accident insurance while 55 million have availed life insurance  while 55 million have availed life insurance under the scheme, he said.

For funding the unfunded, the government introduced the Mudra scheme, Jaitley said, adding that once these accounts became operational the government moved towards formalising and digitising the economy. “To formalise the economy, the government demonetised high value currency, which compelled people to put all their cash into the banking system,” he said.

The government also introduced the goods and services tax (GST) regime where multiple taxes were combined into one, he said, adding that the tax system has become completely online and brought many activities into the formal system. “This is still work on progress,” Jaitley said.

Source : Economic Times