JAM Trinity

JAM Trinity – After 68 years of independence, the country is still suffering from poverty and disparities, though state resources are continuously utilized in the name of poverty alleviation. A series of welfare schemes, over the last 60 years, failed to end the miseries of the most deprived segments of the population. JAM trinity is an attempt to increase the effectiveness of welfare measures by making effective use of available technology.

According to the Economic Survey, about 4.2 percent of the GDP, which works out to be roughly Rs 3.78 lakh crore, is spent on key subsidies, as on March 2015. It is widely accepted that India‘s welfare system is pervaded with leakages. Rampant corruption diverted the benefits intended for the poor to the pockets of middlemen and corrupt officials. Consequently, nearly 22 percent of the population is still living below the poverty line. The current government is trying its best to deliver welfare benefits to deserving segments by direct benefit transfer (DBT) using JAM Trinity.

JAM Trinity

JAM trinity refers to

• J – Jan Dhan Yojana bank account (PMJDY)
• A – Aadhaar, a unique number to identify everybody with biometric details
• M – Mobile phone number

Any customer applying for a bank account under the Pradhan Mantri Jan Dhan Yojana should provide an Aadhaar number as identity proof. The applicant has to produce his mobile number for Aadhaar enrolment in the account. This is the way of linking the trinity. Once the linking is complete, the customer will be identified by the Aadhaar number. The cash can be sent to the linked bank account. Then the account holder can either withdraw the money from the bank or use a mobile phone to collect the cash from designated correspondents.

Role of JAM Trinity

1. JAM trinity can effectively cut the leakages by enabling better delivery of DBT (Direct Benefit Transfer).
2. JAM will lead to the unique identification of beneficiaries thus eliminating fake beneficiaries.
3. JAM will also lead to the financial inclusion of people living in villages and in backward areas.
4. JAM trinity is creating an atmosphere for enabling DBT and will also help in the direct delivery of various government schemes like scholarships for students, Janani Suraksha Yojana, old age pension, etc.

The strong link is that country’s 70 percent of the population uses mobile phones. The lack of full reach of Aadhaar registration and lack of total financial inclusion are weak links of the trinity but the situation has improved substantially on these two counts as well.

Expectations from JAM Trinity

If the JAM Trinity can be seamlessly linked, and all subsidies are routed through bank accounts, real progress in terms of direct income support to the poor may finally be possible. The critical areas that need to be taken care of to make JAM and DBT effective are –

• Adequate and timely disbursement of transaction processing charges to the banks and agents.
• Pacifying the debate around privacy-related issues of Adhaar
• Setting up and monitoring of service quality by the Finance Ministry, TRAI, NCPI, and UIDAI

If these measures are taken, then the twin problem of rationalizing the subsidies and at the same time protecting the poor can be solved effectively.