One of the ongoing challenges in the realm of governance in India has been the last-mile delivery of subsidies to the potential beneficiaries. Heavy leakages in the form of fake beneficiaries, commissions and theft of cash have plagued the system for decades. Since these leakages were shared by the stakeholders across all levels, absence of intent of the executive and political decision makers to solve the problem was conspicuous by the growing economic and social disparity since independence. One of the answers to this ongoing problem is the introduction of direct benefit transfer (DBT) of subsidies.
In 1985, Rajiv Gandhi during a visit to drought-affected Kalahandi district in Odisha, had said that of every rupee spent by the government, only 15 paise reach to the intended beneficiary. This particular statement highlighted the colossal level of corruption and malaise that had percolated in the public delivery system. Consequently, fruits of economic liberalization and fast-paced growth were reaped by the selected few, while the deprived continued to live a life devoid of basic amenities.
However, with strong political will, visible change in ways of governance and use of technology, multiple challenges related to the last-mile delivery are being addressed by the Modi Government.
How Direct Benefit Transfer (DBT) Works?
- Prior to launch of the Jan Dhan Yojana, a scheme to bank the unbanked, significant population of India was dependent on cash as the only means of transaction. As financial inclusion gained pace, almost 80% of India now stands included in the financial system in at least one way.
- Due to unique identification associated with every account, in the form of account number, there is no scope for duplication of accounts or ghost beneficiaries. This plugs leakages through duplication of records.
- The Jan Dhan – Aadhar – Mobile (JAM) trinity has been instrumental in minimizing the role of middlemen and eliminating usury. (Aadhar is not mandatory for DBT; however, it is encouraged due to its ability to function as a unique identifier).
- With the launch of India Post Payments Bank, even far flung areas, which otherwise had limited access to banking services are financially included and equipped.
All these measures and the technology have paved the way for scope of ‘transfer of benefit’ or subsidy amounts ‘directly’ to the account of the beneficiary.
Achievements of DBT
- Electronic Payment Framework is laid down for all Ministries and departments. It is applicable on all Centre Sponsored Schemes (CSS) where benefits are in the form of cash.
- 434 schemes across critical 56 ministries, including education, agriculture, healthcare, animal husbandry, dairying and fisheries, fertilizers, sports, fall under the purview of DBT. With a cumulative DBT of around Rs.5.75 lakh crore, estimated gains amount to Rs 90 thousand crore.
- With a cumulative DBT of around Rs.5.75 lakh crore, estimated gains amount to Rs 90 thousand crore.
- Number of cash schemes increased from 28 (2013-14) to 360 (2018-19).
- Funds transferred through DBT increase from around 7,300 crore (2013-14) to around 140,000 crore (2018-19).
- Total DBT Details in the FY-2018-19:
The following graphs represent yearly fund transfer and growth in DBT beneficiaries:
Figure 1: Number of DBT Beneficiaries (*Sum Total of Beneficiaries across the Schemes; Source: https://dbtbharat.gov.in/)
Figure 2: Year-wise Fund Transfer (Source: https://dbtbharat.gov.in/)
DBT in its current form ensures that there is an end-to-end automation from the time of initiation to completion of the fund transfer. Since there is a single point interface for both, the beneficiaries as well as the officials (bank account), real-time monitoring of status of subsidy transfer is now possible. In addition, pre-defined criterion ensures that only the eligible beneficiaries receive benefits. Successful implementation of DBT has ushered in the era of cashless economy at all layers of social makeup of India. As a result, this has not only helped the country to address the problem of human parasites, who feed off the frauds created due to human intervention, but it has also accelerated the rate of alleviation of poverty levels and converge towards equitable distribution of wealth.