With the aim of reforming Government delivery system by re-engineering the existing process in welfare schemes for simpler and faster flow of information/funds and to ensure accurate targeting of the beneficiaries, de-duplication and reduction of fraud Direct Benefit Transfer (DBT) was started on 1st January, 2013.
With the rapid rollout of Aadhaar in the country, it was felt possible to move to a system of transferring cash benefits directly to the poor.
DBT Mission was created in the Planning Commission to act as the nodal point for the implementation of the DBT programmes. The Mission was transferred to the Department of Expenditure in July, 2013 and continued to function till 14.9.2015. To give more impetus, DBT Mission and matters related thereto has been placed in Cabinet Secretariat under Secretary (Co-ordination & PG) w.e.f. 14.9.2015.
DBT has shown promising results in pilot schemes being run in different parts of the country. These include PAHAL (modified DBTL for LPG subsidy), Public Distribution System (PDS) in Puducherry, Chandigarh and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) payments in Jharkhand, Bihar, etc. The programme has already been universalised since February 2015.
As on April, 2017, DBT onboarded schemes are 135 from 25 Ministries/Departments. To get the utility statistics, click here.
The scope of DBT include all welfare/subsidy schemes operated by all the Ministries/ Departments of Government of India directly or through implementing agencies, which involve cash / kind benefits' transfers to individuals. Accordingly, the scope of DBT covers the following categories of schemes.
Cash Transfer to Individual Beneficiary - This category includes schemes or components of schemes wherein cash benefits are transferred by Government to individual beneficiaries. Example PAHAL, MGNREGA, NSAP etc. This transfer of cash benefits from Ministry/Department to beneficiaries happens through different routes, as given below:
Type of Benefit
MGNREGA, PAHAL, NSAP, Scholarships
SSA, Mid Day Meals, PDS,
Assistance to State for Control of Animal Disease
The success of an ambitious and a highly desirable initiative like DBT depends on a set of a few critical factors. For a heterogeneous and a large country like India, it becomes imperative that these critical success factors are ensured to achieve smooth rollout of a programme like DBT. The key success factors or enablers for an efficacious Implementation of DBT would include:
DBT by leveraging the JAM (Jan Dhan, Aadhaar and Mobiles) trinity and the technological prowess offers to drastically improve the benefit delivery system in the country. The JAM Trinity will enable this novel system to transfer benefits in a leakage-proof, well targeted, cashless and timely manner.
Reserve Bank of India introduced Business Correspondents / Banking Correspondents (BC) as an alternative to brick and mortar banks for infrastructure. BC is presently authorised to offer services such as cash transactions where the bank does not have a branch. As per census 2011, there are 23,333 villages with population above 5,000 and 1,19,761 villages above 2,000 populations. However, there are only 11,224 villages in the country with population above 5,000 which have a bank branch. Business Correspondents/ Bank Mitras will have a vital role in operationalising the programme and ensuring the last mile connectivity. The strong presence of BCs will ensure that payments are disbursed to the beneficiaries on time, at their doorstep and of full value.
A payments bank is like any other bank, but operating on a smaller scale, without involving any credit risk. It can carry out most banking operations and enable transfers and remittances through a mobile phone but cannot advance loans or issue credit cards. The main objective of payments bank is to widen the spread of payment and financial services to small business, low-income households, migrant labour workforce, etc. in secured technology-driven environment across the country. On 19 August 2015, the Reserve Bank of India gave in-principle licences to eleven entities to launch payments banks. With payments banks, RBI seeks to increase the penetration level of financial services in the remote areas of the country.
Mobile money is a fast moving way of payment in the country and could be helpful in providing solution to last mile issue for better accessibility of DBT. There is a need to develop a comprehensive eco-system for carrying out cashless transactions over mobile platform using Aadhaar as identifiers. This will revolutionise the drive for financial inclusion.
For more Information on Direct Transfer Mission, Click here