• India’s DBT Scheme was praised by International Monetary Fund due to its the role of technological innovation in achieving this feat.
• President of the World Bank Group, had also urged other nations to adopt India’s move of targeted cash transfer instead of broad subsidies.
• India managed to provide food or cash support to a remarkable 85 % of rural households and 69 % of urban households due to DBT Scheme.
• In the mid-1980s about huge leakages in India’s public welfare schemes caused feeling of helplessness at the highest levels.
• India has come a long way since then, especially in the last eight years.

• This mainly due to the the aggressive rollout of the DBT programme that transfers subsidies and cash benefits directly to beneficiaries through Aadhaar-linked bank accounts.
• This has been made possible by the inclusive financial sector system.
• Due to this, the most marginalised sections of society have been uniquely linked to the formal financial network.

Direct Benefit Transfer (DBT)

• Direct Benefit Transfer (DBT) was started on 1st January, 2013.
• Aim: Reforming Government delivery system by re-engineering the existing process in welfare schemes.
• It is for simpler and faster flow of information/funds and to ensure accurate targeting of the beneficiaries, de-duplication and reduction of fraud.
• DBT Mission was created in the Planning Commission to act as the nodal point for the implementation of the DBT programmes.

Other schemes that helped DBT in its successful implementation 

DBT alone would not have been able to address the size and scale of the problem of sub-optimal service delivery under government machinery. The other efforts that helped DBT are:

• In 2014, the Government of India launched Pradhan Mantri Jan Dhan Yojana (PMJDY).
• It is a well-structured financial inclusion programme.
• It aims that including all households within the fold of the formal financial network.
• In a mission-mode approach, it endeavoured to open bank accounts for all households, expanded Aadhaar to all, and scaled up the coverage of banking and telecom services.
• It evolved the Public Finance Management System and created the Aadhaar Payment Bridge to enable instant money transfers from the government to people’s bank accounts.
• The Aadhaar-enabled Payment System and Unified Payment Interface further expanded interoperability and private-sector participation.
• This approach not only allowed all rural and urban households to be uniquely linked under varied government schemes.
• Through this scheme, subsidies receive directly into bank accounts and also transferred money with ease.

Present Status of DBT Scheme in India

• By 2022, more than 135 crore Aadhaars have been generated, there are 47 crore beneficiaries under Pradhan Mantri Jan Dhan Yojana.
• 6.5 lakh Bank Mitras delivering branchless banking services and mobile subscribers’ number more than 120 crore.
• Riding on this network, the DBT programme has reached commanding heights towards achieving the government’s vision of “sabka vikas”.
• It became the major plank of the government’s agenda of inclusive growth.
• It has 318 schemes of 53 central ministries spanning across sectors, welfare goals and the vast geography of the country.
• The DBT scheme that began as a pilot in 2013-14 could not have achieved the size and scale it has today without the government’s financial inclusion programme.
• This programme helped plug leakages in welfare schemes, weed out fake or ghost beneficiaries and transfer funds to genuine beneficiaries.
• This ensured significant savings to the exchequer and enabled efficient utilisation of government funds.

DBT Scheme and the COVID-19

• The efficacy and robustness of the DBT network were witnessed during the pandemic.
• It aided the government to reach the last mile and support the most deprived in bearing the brunt of the lockdown.
• Free rations provided to nearly 80 crore people under the Pradhan Mantri Garib Kalyan Yojana.
• Fund transfers to all women Jan Dhan account holders and support to small vendors under PM-SVANidhi, DBT helped the vulnerable to withstand the shock of the pandemic.

Benefits for Rural India

• In rural Bharat, DBT has allowed the government to provide financial assistance effectively and transparently to farmers with lower transaction costs.
• It is also same for fertilisers or any of the other schemes including the PM Kisan Samman Nidhi, PM Fasal Bima Yojana, and PM Krishi Sinchayi Yojana.
• DBT becoming the backbone for supporting the growth of the agricultural economy.
• The benefits received under the Mahatma Gandhi National Rural Employment Guarantee Act and Public Distribution System drive the rural demand-supply chain.

Benefits for Urban India

• In urban India, the PM Awas Yojana and LPG Pahal scheme successfully use DBT to transfer funds to eligible beneficiaries.
• Various scholarship schemes and the National Social Assistance Programme use the DBT architecture to provide social security.
• DBT under rehabilitation programmes such as the Self Employment Scheme for Rehabilitation of Manual Scavengers opens new frontiers.
• It enables social mobility of all sections of society.

Government efforts for DBT Scheme

• The Government developed an enabling policy regime, proactive government initiatives and supportive regulatory administration.
• It allowed the private and public sector entities in the financial sector to overcome longstanding challenges of exclusion of a large part of the population.
• These are essential elements of the pioneering ecosystem created by the government for the aggressive rollout of the ambitious DBT programme.
• It is achieving impressive scale in a short span of six years.

Suggestions

• Need to make ambitious vision, holistic approach and a multi-pronged strategy enabled the DBT ecosystem to deliver impact at a phenomenal scale.
• Need to make DBT approach is to expand further in size and structure as it continues to be the major tool of the government.
• Need to make DBT approach for a more nuanced and targeted intervention towards improving the ease of living.
• Need to promote digital and financial literacy, robust grievance redressal, enhance awareness and an empower innovation system to spread the DBT.

DBT would be crucial for India in addressing the different demands of its population and promoting balanced, equitable, and inclusive growth despite the many difficulties it faces. Numerous millions of people will benefit from the financial inclusion programme, but particularly women, the elderly, and farmers.