The Direct Benefit Transfer is the reform that revolutionized the delivery of government’s transfers including subsidies to the people.
There are numerous transfers from the government to the different sections of the people especially to the weaker sections including: wage payments, fuel subsidies, food grain subsidies, pensions etc. The advantage of DBT is that such subsides and payments are provided directly into the bank accounts of the beneficiaries, removing leakages and enhancing financial inclusion.
Transfer from the government to the people especially the popular ones and that involving millions of people as beneficiaries are made through the platform of DBT over the last few years. Two such major programmes are the LPG subsidy scheme – PAHAL and wage payment under MGNREGS.
What is DBT?
The Direct Benefits Transfer (DBT) simply involves transferring the subsidy amount and other benefits (called transfers) directly to the beneficiaries’ bank accounts instead of providing it through government offices.
Transfer means payment made by the government without receiving anything in return from the beneficiary. Subsidies, scholarships are the main example for transfers.
What are the Advantages of DBT?
The main advantage of the DBT is that leakages are avoided as the government directly provides the fund to the beneficiary. Money is sent into the bank account of the beneficiary.
Another advantage of DBT is that it helps the government to better target the beneficiary. Here the facilitating mechanism is Aadhaar. Since Aadhaar is the universal ID, government can identity the beneficiary from his Aadhaar details while connecting it with DBT.
The DBT Mission: launch and expansion of the programme
Though the DBT Mission was launched on January 1st, 2013 with the Planning Commission, later the DBT Mission and matters related it were placed with Cabinet Secretariat from September 2015 onwards.
Several programmes were added into the DBT platform including Scholarships to students and the NREGS wages.
As on June 2016, around Rs 1.2 lakh crore were disbursed through the DBT platform to nearly 30 crore beneficiaries.
Role of Aadhaar under DBT
Linking DBT with Aadhaar information and ID platform is a major achievement. Government has linked the Aadhaar ID of the beneficiary with the DBT and is aiming to make this link applicable for all payments. Efficient targeting, using the Aadhaar-linked data ensures that the right beneficiary receives the money in his account, thereby ensuring transfer to the deserving persons. Recently the government decided that people earning more than Rs.10 lakh a year would not be eligible for the LPG subsidy.
Widening the coverage under DBT scheme
The DBT scheme has extended the coverage of programmes. Several central sector programmes like NREGA were brought under the DBT later and now there are 74 schemes under it.
Besides the extended coverage, definitions of DBT has also expanded over the years. Now, DBT not only encompasses direct transfer of cash benefits, but also in-kind benefit transfers and transfers to the service providers/enablers within the Scheme design.
Progress of DBT and transaction volume under DBT
A total of 74 schemes and 17 ministries are made under DBT as on March 2016. Since its inception in 2013, maximum contribution towards the transfers have come from Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and PAHAL (DBT scheme for cooking gas subsidy) till June 2016, as per the DBT portal. Under MGNREGS, there were 10.88 crore transactions involving Rs. 61,275.58 crore of payments to workers.
The DBT Portal
Recently, the government has launched a web portal dbt.bharat.gov.in as a key platform for all administrators to access information on all Central and states welfare schemes. It will also give regular updates on progress about the programme. Similarly, it will enable beneficiaries to access details about the subsidies available to them.