How Direct Benefit Transfer scheme has transformed social welfare in India

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CategorySocial

Last Updated20/10/2022

Recently, the IMF lauded India’s DBT Scheme as a “logistical marvel” that reached a lot of people, specifically women, the elderly and farmers.
It is noted that India managed to provide food or cash support to a remarkable 85% of rural and 69% of urban households.

Earlier, there were huge leakages in India’s public welfare schemes.
India has come a long way since then, primarily on account of the aggressive rollout of the DBT programme .
Transfers subsidies and cash benefits directly to beneficiaries through Aadhaar-linked bank accounts.
Made possible by the inclusive financial sector system where the most marginalised sections are uniquely linked to formal financial networks.
DBT alone would not have been able to address the size and scale of the problem of sub-optimal service delivery under government machinery.
An ambitious vision, holistic approach and a multi-pronged strategy enabled the DBT ecosystem to deliver impact at a phenomenal scale.

2014, the Govt embarked on a financial inclusion programme to include all households within the fold of the formal financial network.
Endeavoured to open bank accounts for all households, expanded Aadhaar to all, & scaled up coverage of banking & telecom services.
Also created the Aadhaar Payment Bridge to enable instant money transfers from the government to people’s bank accounts.
The Aadhaar-enabled Payment System & UPI further expanded interoperability and private-sector participation.
Allowed all rural and urban households to be linked under varied govt schemes for receiving subsidies directly into their bank but also transferred money with ease.

By 2022,
135 crore Aadhaars have been generated
47 crore beneficiaries under Pradhan Mantri Jan Dhan Yojana
6.5 lakh Bank Mitras delivering branchless banking services
mobile subscribers number more than 120 crore
DBT programme has reached commanding heights towards achieving the government’s vision of “sabka vikas”.
Has 318 schemes of 53 central ministries spanning across sectors, welfare goals and the vast geography of the country.
Rural India - DBT has allowed the government to provide financial assistance transparently to farmers with lower transaction costs.
The benefits received under the MGNREGA and PDS drive the rural demand-supply chain.
Urban India - 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 Self Employment Scheme for Rehabilitation of Manual Scavengers opens gates enabling social mobility of all sections.
During the pandemic
DBT aided the government to reach the last mile and support the most deprived in bearing the brunt of the lockdown.

The DBT approach is expected to expand further in size as it continues to be the major tool of the government for targeted intervention towards improving the ease of living.
However, digital and financial literacy, robust grievance redressal, enhancing awareness and an empowering innovation system are some of the aspects that would require continued focus.
This would play a vital role for India in meeting the diverse needs of its population and ensuring balanced, equitable and inclusive growth.