June 2018
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Universal access to banking through Jan Dhan Yojana, has enabled plugging of huge leakages

( PM Narendra Modi’s speech at The Global Business Summit: Excerpts)

Entrepreneurship is one of India’s traditional strengths. It was sad to see it neglected in the last few years. “Business” and “profits” had become bad words. We have changed that. We need to value enterprise and hard work, not wealth. Our programs ranging from MUDRA to Start Up India and Stand-Up India provide opportunity to the hard working and to the enterprising. In so doing, we have placed special emphasis on Scheduled Castes, Scheduled Tribes, Other Backward Classes and women. We are empowering them to become masters of their own destinies.

Creating opportunities for cities and towns to grow is very crucial. Urban areas are an engine of growth. A key initiative for urban transformation is the Smart City Mission. The Mission has several ‘firsts’. It is the first time that certain areas in cities will be comprehensively developed in a systematic and qualitative way. These areas will act as ‘light houses’ which will eventually influence the rest of the city.  It is the first time that there has been such extensive citizen consultation. Nearly 2.5 million people participated through contests, discussions, polls, blogs and talks on the MyGov platform. This is a major break from the top-down approach to urban planning. It is the first time that allocation of funds in a government scheme is done not by decisions of ministers or officers but on the basis of competition. This is a good example of competitive and cooperative federalism.

Many experts have commented on the need to reduce subsidies. The new universal access to banking through the Jan Dhan Yojana, has enabled plugging of huge leakages in subsidies. In developing countries, fuel subsidies are generally very difficult to tackle. We have successfully decontrolled cooking gas prices. We are now operating the world’s largest direct benefit transfer scheme for cooking gas. Subsidies are transferred to the bank account of households.  Through electronic verification, multiple and bogus connections are eliminated. This enables genuine beneficiaries to get what they deserve while eliminating those who are not eligible. This has substantially reduced the subsidy.

Another subsidized fuel is kerosene, used by the poor for cooking and lighting, and distributed by state governments. There is clear evidence that a large quantity of subsidized kerosene is misused and diverted.  We have begun a pilot in 33 districts where kerosene will be sold at market prices. The difference between market price and the subsidized price will be transferred directly to bank accounts of those who are poor. The poor will be properly identified through bank accounts and biometric identification through Aadhaar. This will eliminate duplicate, non-eligible and bogus consumers. This elimination will reduce the total subsidy.