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:
- Eliminate Leakages – e.g. MGNREGS saw 10 percent savings on wages on account of deletion of duplicate, fake/non-existent, ineligible beneficiaries.
- It reduces corruption and abuse of power.
- 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:
- Focus should be on Identification of beneficiaries.
- Digitisation of beneficiary database.
- Creating digital infrastructure at remote and far flung areas.
- Digital and financial literacy.
- Financial inclusion using Neo Bank and Payment Bank.