Direct Benefit Transfer Scheme

Direct Benefit Transfer

• The Direct Benefit Transfer scheme is a programme initiated by the Government of India to transfer funds under various welfare schemes directly to its recipient.
• The delivery process under this scheme is simpler and faster, ensuring accurate targeting of the beneficiaries and reduction of fraud.
• The amount is transferred directly to the people through their linked bank accounts.

Significance

• The subsidy amount is directly credited into the beneficiary accounts without the involvement of the middlemen.
• The incidence of theft from government-sponsored schemes is reduced.
• It provides the government a platform to communicate with both citizens and program participants.
• The DBT scheme helps in the distribution of funds to citizens who are in need of it.

Limitations with Direct Benefit Transfer

• There are many rural & tribal areas, which don’t have banking facilities and road connectivity.
• As of now, only 3% Indians pay income tax. So, determining the income of the rest of the citizens is still a challenge hence making it difficult to identify the deserving beneficiaries.
• Direct cash may not be used for intended purpose and can be used in unhealthy ways. For example, the cash instead of food subsidy may be spent on drinking and smoking as most of the beneficiaries' families’ heads are men.
• Micro ATMs, which were set up to deliver cash benefits at door step are not present in many areas hence many beneficiaries have to travel long to withdraw money.
• Most of the beneficiaries’ families’ heads are men. This will be a disadvantage to women as there is no guarantee that they will get their share of the cash.

Though there are some loopholes involved in the Direct Benefit Transfer scheme, this program is an excellent way to ensure that every ‘paisa’ reaches the deserving beneficiaries, if carefully implemented.