GS Paper 3
Source: Indian Express
Directions: This Article has been taken from the Indian Express. This article is important from the mains perspective.
Context: Recently, 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.
Factors that contributed to the success of DBT
- Inclusive financial sector system where the most marginalised sections of society have been uniquely linked to the formal financial network.
- Mission mode approach: In a mission-mode approach, the 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 and created the Aadhaar Payment Bridge to enable instant money transfers from the government to people’s bank accounts.
- Aadhaar-enabled Payment System and Unified Payment Interface further expanded interoperability and private-sector participation.
- 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.
Hurdles for successful implementation of DBT
- Complex and multi-layered governance machinery
- India’s diversity
- access barriers, and
- digital divide
Implementation of DBT scheme: The DBT scheme began as a pilot in 2013-14.
- In rural Bharat
- Effective and transparent financial assistance: DBT has allowed the government to provide financial assistance effectively and transparently to farmers with lower transaction costs.
- Agricultural scheme – 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 — benefits from the DBT thus became the backbone for supporting the growth of the agricultural economy.
- MGNREGA: The benefits received under the Mahatma Gandhi National Rural Employment Guarantee Act and Public Distribution System drive the rural demand-supply chain.
- In urban India
- PM Awas Yojana and LPG Pahal scheme successfully use DBT to transfer funds to eligible beneficiaries.
- Various scholarship schemes and the National Social Assistance Programme use the DBT architecture to provide social security.
- 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.
- During pandemic
- The efficacy and robustness of the DBT network 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.
- India managed to provide food or cash support to a remarkable 85 per cent of rural households and 69 per cent of urban households through its DBT networks according to World Bank”.
Benefits of DBT:
- Financial inclusion,
- Helped plug leakages in welfare schemes,
- Helped weed out fake or ghost beneficiaries and transfer funds to genuine beneficiaries.
- Ensured significant savings to the exchequer
- Enabled efficient utilisation of government funds
- infused confidence of citizen in the governance
Current challenges before DBT networks
- digital and financial literacy
- robust grievance redressal
- enhancing awareness and an empowering innovation system
DBT is expected to play a vital role for India in meeting the diverse needs of its population and ensuring balanced, equitable and inclusive growth.
Do you Know?
By 2022, more than 135 crore Aadhaars have been generated, there are 47 crore beneficiaries under Pradhan Mantri Jan Dhan Yojana, 6.5 lakh Bank Mitras delivering branchless banking services and mobile subscribers number more than 120 crores.
Prelims link
About DBT Schemes like Pahal, MGNREGA, PMSvanidhi etc.
Mains Links:
Q. Critically analyse the performance of the Direct Benefit Transfer (DBT) scheme in seamless and timely delivery of benefits to the intended beneficiaries.
Q. How DBT Mission improved the government’s welfare transfers? Discuss the challenges associated too.
