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    You are at:Home»News»Role of Direct Benefit Transfers Scheme in Social Welfare

    Role of Direct Benefit Transfers Scheme in Social Welfare

    GpostingBy GpostingNovember 2, 2022No Comments6 Mins Read
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    Recently, India received praise from around the world when the International Monetary Fund (IMF) applauded and called the Direct Benefit (DBT) Scheme of the Government of India a “logistical marvel”. According to David Malpass, President of the World Bank Group, “India managed to provide food or cash support to a remarkable 85 percent of rural households and 69 percent of urban households”, and he called on other nations to adopt India’s move to use targeted cash transfers rather than broad subsidies.

    The Direct Benefit (DBT) Scheme was started in January 2013. The DBT Scheme is an important topic of GS Paper 3 of the civil services exam. It is the government’s major reform endeavour to reengineer the current delivery systems, ensuring improved and timely delivery of benefits. It transfers benefits into the bank/postal accounts, preferably Aadhaar-seeded, of precisely targeted beneficiaries, as well as in-kind transfers from the government to specific beneficiaries using Information & Communication Technology (ICT).

    Objectives of DBT

    Direct Benefit Transfers operate in two ways: cash transfer or in-kind transfer. In in-kind transfers, the government provides benefits to people through an intermediary organisation that buys the products for general consumption and makes them freely or affordably available to the beneficiary. The Public Distribution System (PDS) is the finest example of DBT. The following are the objectives of the DBT Scheme:

    • Electronic transfer of benefits, minimising levels involved in benefit flow
    • Accurate targeting of the beneficiary
    • Curbing pilferage and duplication
    • Reduced delay in payments

    Factors Making DBT a Success

    • Mission-mode strategy: Using a mission-mode strategy, the government made an effort to open bank accounts for every household, expand Aadhaar to everyone, and increase the reach of banking and telecom services.
    • The most marginalised groups in society have been linked directly to the official financial network in an inclusive financial sector framework.
    • The Unified Payment Interface and Aadhaar-enabled Payment System have increased interoperability and private sector participation.
    • To facilitate immediate money transfers from the government to citizens’ bank accounts, the Public Finance Management System and the Aadhaar Payment Bridge were developed.
    • The private and public sector entities in the financial sector were able to address long-standing issues with the exclusion of a significant population segment due to an enabling legislative regime, aggressive government initiatives, and supportive regulatory administration.

    Implementation of the DBT Scheme

    DBT was implemented as a pilot programme in 2013–2014, both in urban and rural India:

    • In Urban India:
      • The Self Employment Scheme for Rehabilitation of Manual Scavengers is one of the rehabilitation programmes funded by DBT that opens new doors for social mobility for all societal groups.
      • The DBT architecture is used to provide social security through several scholarship programmes and the National Social Assistance Programme.
      • DBT is successfully used in the PM Awas Yojana and LPG Pahal schemes to distribute cash to eligible recipients.
    • In Rural India: 
      • Rural demand-supply chains are driven by MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) and the Public Distribution System.
      • Benefits from the DBT were thus used to assist the growth of the agricultural industry, whether for fertiliser or any of the other agricultural programmes, such as the PM Kisan Samman Nidhi, PM Fasal Bima Yojana, and PM Krishi Sinchayi Yojana.
      • Effective and transparent financial assistance: DBT has made it possible for the government to give farmers financial help in a cost-efficient and transparent manner.
    • In Pandemic:
      • According to the World Bank, India was able to support a staggering 86% of rural households and 69% of urban households through its DBT networks.
      • The Pradhan Mantri Garib Kalyan Yojana, which provided over 80 crore people with free food, the PM-SVANidhi programme, which provided assistance to small vendors, and financial transfers to all women who had Jan Dhan accounts allowed the vulnerable to survive the pandemic.
      • The DBT network’s effectiveness and durability helped the government go the extra mile and protect the most vulnerable people while they bore the brunt of the lockdown.

    Benefits of DBT

    • Increased public trust in the government: DBT improved the government’s efficiency, effectiveness, accountability and transparency while boosting public trust in the political process.
    • DBT and other governance reforms have led to the removal of duplicate/fake beneficiaries and the plugging of leakages etc., as a result of which the government has been able to target genuine and deserving beneficiaries.
    • Enabled efficient utilisation of government funds and ensured significant savings to the exchequer
    • Financial inclusion: DBT led the opening of the bank accounts of the most vulnerable group in society and helped in financial inclusion.
    • The use of modern technology and IT tools in the DBT will help realise the dream of maximum governance and minimum government. 

    Challenges in DBT

    The DBT Scheme is a successful initiative, but its implementation has several challenges: complex and multi-layered governance machinery, financial literacy, India’s diversity and access barriers. In addition to these, there are a few more challenges of the scheme, which are given below:

    • Duplication: A recent assessment of the operation of the Unique Identification Authority of India (UIDAI) by the Comptroller and Auditor General of India (CAG) revealed that the Aadhaar database might include identical biometric data for many citizens. This causes duplicate and incorrect account credits.
    • Exclusion: Approximately 91% of the population has registered for an Aadhar. Since most of the initiatives have DBT tied to Aadhar, it is important to increase the Aadhar connection to 100% so that no one is excluded.
    • Digital illiteracy: A large proportion of people in rural areas lack the digital literacy needed for the smooth working of DBT.

    The DBT approach is expected to continue growing in scope and organisation as the government’s primary tool for a more precise and focused intervention aimed at enhancing the quality of life. In order to address the different requirements of its population and promote balanced, equitable, and inclusive growth, this would be extremely important for India.

    The laurel from the IMF of India’s DBT Scheme makes it an important topic from the exam’s point of view. The aspirants must prepare all the relevant topics mentioned in the syllabus of UPSC to be able to perform well in the Mains exam. Reading newspapers regularly will help to keep a tab of such topics, which are dynamic in nature.

    For any updates related to the CSE, aspirants must regularly check the official website of the UPSC.

     

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