DBT stands for Direct Benefit Transfer, which is a program that the Government of India launched on January 1, 2013. DBT intends to directly transfer the subsidies that the government grants to the under-privileged population.
What is DBT?
The underprivileged population receives subsidy benefits under several central schemes. However, sometimes, it fails to reach the deserving candidate due to malpractices by the mediators. DBT aims to mitigate the subsidy loss to the poor and unprivileged due to corruption. In other words, it is for the replacement of the ill practices in the existing system. The Government of India initially launched the DBT/Direct Benefit Transfer program for 34 central schemes.
With the DBT program, the GOI targets to make payments of the subsidies directly to the beneficiaries. This helped in removing any malpractices such as diversions and duplicate payments. As the name suggests, the government directly transfers the benefits of DBT to the bank accounts of the end beneficiaries. Hence, these are the Aadhaar linked bank accounts that confirm the identity of the right beneficiaries.
Why DBT – Benefits of Direct Benefit Transfer
The very purpose of DBT explains its uses and benefits. DBT program carries several advantages for both the beneficiaries and the government such as below:
- DBT brings transparency and eliminates the malpractices in subsidy distribution. Therefore, it helps in reduction of the frauds and scams
- DBT helps in securing subsidies to the deserving candidates below the poverty line. So, the government can reach out to the target beneficiaries
- DBT terminates pilferage from the distribution of funds and prevents misuse of government’s funds
- DBT covers several central schemes under it. These include National Child Labour Project Student Scholarships, LPG subsidy, Dhanlakshmi Scheme, Janani Suraksha Yojna, etc.
- DBT is a robust payment and reconciliation platform which is integrated with multiple organizations. It works in a unified manner with RBI, NPCI, 500+ public, private sector, regional/rural Banks, and cooperative banks
- DBT emerged as a great tool in reaching out to people to provide COVID-19 relief subsidies. As a result, Public Financial Management System (PFMS) team transferred cash amounts using the digital payments technology vehicle. PFMS functions under Central Schemes (CS) and Centrally Sponsored Schemes (CSS)
How does the DBT Program Work?
DBT is a well-planned and well-integrated program. It works in association with other central bodies. The Planning Commission of India designed it and it functions in the following manner of network:
- The Office of Controller General of Accounts implements the Central Plan Scheme Monitoring System (CPSMS). The GOI prepares the beneficiary list with the help of CPSMS. It acts as the common platform for routing DBT. All relevant orders related to the DBT are also available on the CPSMS website
- The beneficiary list is digitally signed. The processing of payments in the beneficiary bank accounts is done using the Aadhaar Identification. Thereby, Aadhaar becomes the Payment Bridge and DBT works in association with NPCI
- DBT works along with RBI and several banks that include private, public, co-operative, and regional banks. The government also processes the payments through bank account numbers if Aadhar isn’t available
- DBT initiates payments through Fund Transfer Order, other MIS-related functions, etc.
- MNREGA, PM-AWAS, PM-KISAN, DBT-PAHAL, etc. are some examples of workflow-based systems that benefitted from DBT. The GOI conducted a pilot experiment and once it showed positive results, it expanded the program
- The GOI carried out the DBT program in various phases. The government implemented the first phase in 43 districts and then extended it to 78 districts. Phase wise expansion helps in steady growth as well as to measure the performance and success of the programs
- The government keeps adding new welfare schemes and covers them under DBT as an expansion of the existing program
Wrapping it up:
Direct Transfer Benefit (DBT) has helped to reduce subsidy leakages and associated delays. These occurred due to fund distribution through various channels and multi-steps. The malpractices in diversion and duplication of funds owed to its flow in a multi hierarchy of administrative offices until it reached the end beneficiary. The GOI re-engineered the existing system for the faster and right flow of funds in welfare schemes. It is a direct cash transfer from the treasury of the GOI to the bank accounts of beneficiaries.