Financial Inclusion

Saansad Adarsh Gram Yojana : Role of Banks

The Prime Minister Sri Narendra Modi had announced on 11th October 2014 that each Member of the Parliament(MP) of the Lok Sabha and Rajya Sabha should adopt three villages in his/her constituency and ensure their development  while focusing on improvements in the village economy which will lead to enrichment of human life.

Saansad Adarsh Gram Yojana Meaning

Saansad in hindi means “Parlimentarian” and the term “Saansad Adarsh Gram Yojana” literally translates into english as  “The Parlimentarian’s Idea Village Scheme”. This scheme provides members of parliament to showcase their administrative skills , while providing an opportunity to visualize changes on a micro-scale.

The Saansad Adarsh Gram Yojana, therefore, is a comprehensive aiming at, inter alia, provision of smart schools;  universal access to basic health facilities; pucca houses with electricity connection and toilets for the homeless or those living in kutcha houses; piped drinking water;  universal PDS for eligible families, all weather connectivity to the main road ; e-governance, and Aadhaar cards for all. India since 1952 has been implementing programs in one or the other form to provide most of these facilities in villages through establishing nationwide community development blocks & national extension service and allocating annually huge financial and other resources.

sansaad adarsh gram yojana meeting

However, these programs did not yield expected dividends as according to Multidimensional Poverty Index [MPI] worked out by the UNDP & Oxford University in July 2010, about 645 million people [55%] in India are poor.

Eight States [Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal] have 421 million MPI poor. MPI considers 10 measurable indicators, viz. Education [child enrolment and years of schooling]; Health [child mortality and nutrition] and Standard of living [electricity, drinking water, sanitation, cooking fuel, flooring and assets].

This Saansad Adarsh Gram Yojana can be successful only when elected legislators demonstrate their political will, program implementers deploy their proven administrative & managerial skills and experienced and professional bankers offer banking & financial expertise in an effective coordinated manner. In this context, each legislator will have to consider following aspects and release in print and electronic media.

  • Existing status of the development of the village in respect of each component of development in detail.
  • Facilities yet not available and reasons thereof
  • Number and percentage of households having Savings & Credit facilities separately.
  • Road map to complete all components of development provided in the Saansad Adarsh Gram Yojana by March 2019
  • Independent evaluation of the level of satisfaction of the services currently provided to the village-households and how to ensure full satisfaction with accountability. .

Bank’s Commitment

While banks, having successfully implemented Financial Inclusion Plans and responded to the Pradhan Mantri Jan Dhan Yojana, have now to demonstrate adequate concern and total commitment in these selected villages when the Prime Minister himself has asked legislators to adopt villages and show the tangible results by 2016/2019. Banks through effective coordination with concerned departments/agencies need to ensure that credit is provided to

[i] all eligible farmers under agriculture and animal husbandry activities improves productivity of crops/ hectare and milk or eggs or meat per animal or poultry bird

[ii] rural artisans creates substantial number of gainful employment and contribute to the process of rural industrialization

[iii] micro& small enterprises generates significant number of self-employment opportunities. Each bank will have its board approved policy to complete following unfinished task in these selected villages by 31st March 2019.

  • Bring under banking fold all those financially excluded adult persons or not availing  any kind of banking and financial services, viz. savings, credit, remittances, insurance, among others.
  • Since Kisan Credit Card scheme has been improved in May, 2012 provide smart cards to all farmers including those who have yet not been provided and train them to use them as frequently as possible/necessary. Familiarize them with the latest improvements already introduced.
  • Establish Farmers Club and strengthen/revitalize if there be any  to deliver the expected goals as comprehensively described by the NABARD
  • Establish Self-Help-Groups for women in particular and nurture them adequately according to the mandated requirements of NABARD before linking to credit to avoid building up NPAs.
  • Link Aadhar card with bank account of the concerned customers to facilitate them avail subsidy and other benefits of Government’s programs under the Direct Benefit Transfer scheme.
  • In order to create impact of institutional credit on increasing farm productivity and farmer’s net income/profit ensure to increase area under irrigation and efficient use of irrigation through sprinklers and drip irrigation system, and forming Water Users’ Associations and arrange their training. Finance [i] farm mechanization on a selective basis and commercial farming[ii] service providers to help small/marginal farmers for farm-mechanization and storage facilities [iii] dealers and suppliers of inputs of crop production and animal husbandry activities.

Perspective Plan    

Each Bank can formulate a perspective plan ending 31st March 2019 for selected villages and implement strategic action plan annually to achieve following goals.

  • Savings: All adults should have at least Savings Accounts and depending upon their income stream can have varying number of short/term deposit accounts.
  • Credit: Bank can provide need-based and demand-driven credit to all eligible adults after scientific assessment in respect of any economic activities under agriculture, animal husbandry, micro and small enterprises
  • Personal loans: Depending upon their needs and repaying capacity personal loans can be considered.
  • Insurance: Client’s life and income generating assets can be insured by having a tie-up arrangement with LIC and other Insurance companies.

Focused Attention: Following actions need focused attention so as to create impact of bank credit in the selected villages

  • Review the format prepared by the RBI under service area approach to collect, collate and analyse village data for formulating village credit plan and refine the same in light of new developments, test it and use it.
  • Coordinate effectively with Government departments of agriculture and animal husbandry in order to ensure that use of institutional credit improves the productivity of crops, vegetables, fruits per unit of area and resources.
  • Implement Financial Literacy program as comprehensively developed by the RBI to create awareness and better understanding of banking & financial products among village-households and ensure their usage to increase number of transactions.
  • Debt counselling in villages is a must to create awareness and better understanding among clients about the principles of development through credit and restructuring of loans in the event of unforeseen circumstances.
  • Provide capacity building training to customers to use banking and credit services for income generation
  • Pilot test and implement selectively debt-swapping scheme to relieve existing farmers from the clutches of the moneylenders.
  • Implement loan against warehouse-receipts scheme
  • While farmers having landholding above five hectares can be motivated to avail loan for several purposes including personal loan for a variety of purpose, endeavor to understand the credit needs of small and marginal farmers which can be extended according to the extant instructions of the RBI under the Joint Liability Group scheme.
  • Understand the problems of households in relation to banking, credit, remittances, insurance and resolve them through discussion with higher authorities.
  • Ensure that the selected village becomes a nodal village and trend setter for other four-five surrounding villages


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