Direct Benefit Transfer or DBT is a government program to transfer subsidies to the respective beneficiaries conveniently. With many welfare programs introduced by the Government of India, DBT ensures its benefits reach the underprivileged population on time without hassle.
Often, the funds released from the government trusts take time to reach the targeted population. Furthermore, if the fund distribution process involves mediators, it may take longer and increase the chances of fraud. So, DBT emerged as a reform to increase accuracy.
Read on to learn the meaning of DBT, how it works, its types, benefits and more.
Introduced on January 1, 2013, the Direct Benefit Transfer Scheme enhances the transferability of the subsidies, funds and benefits directly to the people through their linked bank accounts. Using this initiative, the government aims to provide financial benefits to women, children and people involved in labour welfare.
Initially, DBT was introduced in 43 districts, after which 78 districts were added to 27 different schemes. Currently, DBT has been active in 300 districts since the introduction of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
To improve transparency, the government starts by compiling the list of people eligible for funds with the help of the Central Plan Scheme Monitoring System (CPSMS). Afterwards, an Aadhaar card acts as a government ID through which the required details can be retrieved, making it easy to transfer funds to the intended beneficiaries.
However, having an Aadhaar card is not mandatory, as the Government also uses the Jan Dhan Account and Mobile connections to implement DBT. With this scheme, 43 crore beneficiaries have received subsidies so far through 316 crore DBT.
DBT, RBI and several banks, including private, public, cooperative and regional banks, process the payments directly into the beneficiary’s accounts. This way, account holders can get the funds and benefits without the involvement of any middleman.
Also Read: Personal Loan Balance Transfer
Here are different kinds of welfare and subsidy programs under the Direct Benefit Transfer scheme:
1) Cash Transfer
Under this option, the cash benefits that get transferred reach directly to individual beneficiaries using the following methods:
2) In-Kind Benefit
With in-kind transfers, beneficiaries receive the benefits through an appointed third party. The beneficiary gets the product or service free of cost as the government or intermediary bears all internal costs. Kerosene, school books, vaccinations and fertilisers are some examples of in-kind subsidies.
3) Other Transfers
This involves all the other types of benefits apart from cash and in-kind transfers to non-government entities that help in implementing government policies. These include community workers, NGO workers, ASHA workers, incentives, teachers and others.
The DBT Scheme also allows fund or subsidy transfers to other non-governmental functionaries that enable the implementation of government policies. It includes community workers, aided school teachers, NGO workers and others. These members are not beneficiaries but are still offered training, wages, food and other benefits.
Now that you know the meaning of DBT and its types, here are some top benefits:
In addition to the above benefits, the Direct Benefit Transfer scheme proved to be most beneficial during the COVID-19 pandemic, with the imposition of lockdown. Since its introduction, beneficiaries get direct benefits from the government treasury to their bank accounts securely.
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Direct Benefit Transfer or DBT, meaning a government scheme that intends to reform the existing delivery system for funds and subsidies transfer. It aims to reduce duplication and fraud by directly transferring funds from the government treasury to beneficiary accounts.
No, the government can also retrieve the required details from Jan Dhan account or mobile number linked to the bank account.
To receive DBT benefits, you must visit your nearest bank branch and fill up the required mandate to link your Aadhaar number. If you are eligible, you will become a beneficiary of the scheme and receive its benefits.
