Government using demonetisation to push for financial inclusion: Report

The Narendra Modi government is using demonetisation as an opportunity to push its agenda of financial inclusion. State governments, banks and employers have been asked to open bank accounts for temporary and contractual workers and pay them by depositing salaries in their bank accounts.

"In order to facilitate financial inclusion of workers and to ensure timely payment of their wages, it has been decided to launch a campaign to open bank accounts in respect of those workers of organised and unorganised sectors who do not have their own bank accounts even now," Financial Express quoted Ministry of Labour and Employment Secretary M Sathiyavathy's letter to chief secretaries of various states as saying. 

Chief Labour Commissioner AK Nayak, in a letter to all deputy chief commissioners said: "All principal employers and contractors should be advised to ensure payment of wages to all employees, including contract workers, only through bank accounts."

The letter further stated that "for financial inclusion of workers, it has become necessary to ensure payment of wages to workers through bank accounts. Accordingly, you are advised to take up with all major employers to get bank accounts opened in respect of each worker/employee, if not already opened, especially in respect of contract and casual workers. This may be accorded top priority as payment has to be made for the current month by the end of this month or by the first week of the following month."

The motive of gaining financial inclusion is that salaries paid through bank accounts would bring in more transparency in the system as both employers and employees can be tracked for any tax evasion, the Financial Express reported.

According to reports, Jan Dhan accounts have been used for illegal transfers since PM Modi announced the decision to ban notes of Rs 500 and Rs 1,000. The accounts have witnessed deposits worth Rs 27,200 crore in just two weeks.