Direct Benefits Transfers

India’s Direct Benefit Transfer Schemes


From UPSC perspective, the following things are important :

Prelims level: JAM trinity

Mains level: JAM trinity, financial inclusion and Direct Benefit Transfer



  • Last week, the International Monetary Fund (IMF) lauded India’s Direct Benefit Transfer (DBT) Scheme as a “logistical marvel” that has reached hundreds of millions of people and specifically benefitted women, the elderly and farmers. Paolo Mauro, Deputy Director in the IMF’s Fiscal Affairs Department, praised the role of technological innovation in achieving this feat.

What is Direct Benefit Transfer(DBT)?

  • 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 Direct Benefit Transfer (DBT) was started on 1st January, 2013.
  • DBT Mission was created in the Planning Commission to act as the nodal point for the implementation of the DBT programmes. The Mission was transferred to the Department of Expenditure in July, 2013 and continued to function till 14.9.2015. To give more impetus, DBT Mission and matters related thereto has been placed in Cabinet Secretariat under Secretary (Co-ordination & PG).


Efforts behind the efficient DBT

  • Mission-mode approach for financial inclusion: Government endeavoured to open bank accounts for all households, expanded Aadhaar to all, and scaled up the coverage of banking and telecom services.
  • Public Finance Management System through Aadhar: It evolved the Public Finance Management System and created the Aadhaar Payment Bridge to enable instant money transfers from the government to people’s bank accounts.
  • Participation of various stakeholders for extensive UPI: The Aadhaar-enabled Payment System and Unified Payment Interface further expanded interoperability and private-sector participation.
  • Directly receiving of subsidies: This approach not only allowed all rural and urban households to be uniquely linked under varied government schemes for receiving subsidies directly into their bank accounts but also transferred money with ease.

What is the Present status of DBT?

  • The status of JAM trinity (Jan Dhan Aadhar Mobile)
  • By 2022, more than 135 crore Aadhaar’s have been generated,
  • There are 47 crore beneficiaries under Pradhan Mantri Jan Dhan Yojana,
  • Mobile subscribers number more than 120 crores.
  • Riding on this network, the DBT programme has reached commanding heights towards achieving the government’s vision of “sabka vikas”.
  • Last mile banking through Bank Mitras: 5 lakh Bank Mitras delivering branchless banking services.
  • DBT applicable to government schemes: Becoming the major plank of the government’s agenda of inclusive growth, it has 318 schemes of 53 central ministries spanning across sectors, welfare goals and the vast geography of the country.


How benefits are delivered through DBT?

  • DBT in rural areas: In rural Bharat, DBT has allowed the government to provide financial assistance effectively and transparently to farmers with lower transaction costs be it for fertilisers or any of the other schemes including the PM Kisan Samman  Nidhi, PM Fasal Bima Yojana, and PM Krishi Sinchayi Yojana  thus becoming the backbone for supporting the growth of the agricultural economy.
  • DBT in urban area: In urban India, the PM Awas Yojana and LPG Pahal scheme successfully use DBT to transfer funds to eligible beneficiaries.
  • Benefits under MGNAREGA: The benefits received under the Mahatma Gandhi National Rural Employment Guarantee Act and Public Distribution System drive the rural demand-supply chain.
  • Various assistance programmes: Various scholarship schemes and the National Social Assistance Programme use the DBT architecture to provide social security.
  • Scheme for rehabilitation: DBT under rehabilitation programmes such as the Self Employment Scheme for Rehabilitation of Manual Scavengers opens new frontiers that enable social mobility of all sections of society.
  • DBT as last mile support in Pandemic: The efficacy and robustness of the DBT network were witnessed during the pandemic. It aided the government to reach the last mile and support the most deprived in bearing the brunt of the lockdown. From free rations to nearly 80 crore people under the Pradhan Mantri Garib Kalyan Yojana, fund transfers to all women Jan Dhan account holders and support to small vendors under PM-SVANidhi, DBT helped the vulnerable to withstand the shock of the pandemic.


What are the reasons for successful DBT schemes?

  • An enabling policy regime: Proactive government initiatives and supportive regulatory administration allowed the private and public sector entities in the financial sector to overcome longstanding challenges of exclusion of a large part of the population.
  • Creation of a dedicated ecosystem: These are essential elements of the pioneering ecosystem created by the government for the aggressive rollout of the ambitious DBT programme, achieving impressive scale in a short span of six years.


  • Direct Benefit Transfer has transformed the welfare aspect of the governance. Going forward digital and financial literacy, robust grievance redressal, enhancing awareness and an empowering innovation system are some of the aspects that would require continued focus. This would play a vital role for India in meeting the diverse needs of its population and ensuring balanced, equitable and inclusive growth.

Mains Question

Q.Enlist the schemes that comes under DBT. How DBT has changed the lives of needy people in urban and rural India?

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