While it is true that certain rights of convicts are curtailed when they are convicted and sentenced, the extent to which public funds can be utilized for their welfare, and the welfare of their families, needs to be looked at from the point of view of what imprisonment seeks to achieve. There has been a gradual and definitive shift towards the reformative theory of punishment. Imprisonment is not merely to punish, but reform. The idea is to rehabilitate them into, and not to alienate them from, the mainstream of society. For example, jails in West Bengal have been rechristened ‘Correctional Homes’. The fundamental rights conferred by our Constitution are all enforceable by a convict with certain basic restrictions. A catena of judgments of the Supreme Court have affirmed their rights to legal aid, reasonable wages for work done by them, right to expression etc. Furthermore, families of convicts may get exposed to financial hardships and are the worst affected despite being entitled to every right of a free citizen. Considering this, welfare schemes have been devised by the various State governments  and NGOs have been allowed to participate in this endeavor. The Courts have also been monitoring these schemes. These include arranging education for children of convicts and means of livelihood for family members. Many of these efforts are state sponsored. The spirit and letter of Indian laws encourage this approach. The present scheme of Jan Dhan Yojna of providing life insurance cover and opening bank accounts will help them gain financial stability and whatever money an inmate earns working in the jail will be deposited directly to their respective accounts and their families will also have access to the account and be able to withdraw cash as per their needs. Through this scheme the jail administration will be able to help the inmates’ families to have access to the financial gains in situations like suicides and deaths inside the jail. Therefore, if the prison administration also intends to pay the premium entirely or subsidize a part of it, nothing prevents public funds from being used for this purpose as it is not barred under any law and on the contrary, it fulfills the aspirations of modern ideas of the reformative theory of punishment.
 http://www.dnaindia.com/india/report-tihar-inmates-to-get-life-insurance-cover-under-jan-dhan- yojna-2045841