Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has limitations too. Comment.

Direct Benefit Transfer (DBT) was started on 1st January, 2013, 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.

Progressive step:

1. Eliminate Leakages – e.g. MGNREGS saw 10 percent savings on wages on account of deletion of duplicate, fake/non-existent, ineligible beneficiaries. 
2. It reduces corruption and abuse of power. 
3. It ensures faster delivery of services.

Limitation:

• Aadhar registrations presently covered around 91% of population. Since DBT is linked with Aadhar for schemes, there is need to improve Aadhar linkage to 100% so that not a single person can be left out. 
• Low level of digital literacy in the rural areas. 
• India has reached 81% financial inclusion and this will potentially exclude people from the rural background. 
• Banking correspondents also struggle with connectivity and technical problems. 
• Banking services at rural level needs to be improved to reach benefits to all.

Way forward:

1. Focus should be on Identification of beneficiaries.
2. Digitisation of beneficiary database. 
3. Creating digital infrastructure at remote and far flung areas. 
4. Digital and financial literacy. 
5. Financial inclusion using Neo Bank and Payment Bank.