The Direct Benefit Transfer (DBT) Scheme represents a transformative approach to reforming government delivery systems by ensuring efficient and transparent transfer of benefits to the intended recipients. While this scheme enhances accessibility and reduces leakages, it also faces limitations related to digital literacy and infrastructure disparities.

Q.8 Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment.

Model Answer:

Introduction

The Direct Benefit Transfer (DBT) scheme, launched by the Government of India, aims to transfer subsidies and benefits directly to the beneficiaries' bank accounts, thereby reducing intermediaries and ensuring efficient delivery. As of 2023, the DBT scheme has successfully transferred over ₹5 lakh crore to beneficiaries, significantly reducing leakages and improving transparency.

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Positive Outcomes:

  • Reduced Leakages: By directly transferring benefits to beneficiaries, DBT has minimised the role of intermediaries, thereby reducing corruption and pilferage. For instance, the LPG subsidy under the PAHAL scheme has saved the government approximately ₹50,000 crore.
  • Increased Transparency: The use of Aadhaar-linked bank accounts ensures that benefits reach the intended recipients, enhancing accountability. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) payments through DBT have improved transparency in wage disbursements.
  • Efficiency in Delivery: DBT has streamlined the process of subsidy distribution, reducing delays and ensuring timely payments. The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme is a notable example, where farmers receive ₹6,000 annually in three instalments directly into their bank accounts.

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Limitations:

  • Financial Inclusion Challenges: Despite significant progress, a considerable portion of the population, especially in rural areas, remains unbanked or underbanked. According to the Global Findex Database 2021, about 20% of Indian adults still do not have a bank account.
  • Lack of Last Mile Connectivity: Inadequate digital infrastructure and internet connectivity in remote areas hinder the effective implementation of DBT. The BharatNet project, aimed at providing broadband connectivity to all gram panchayats, is still a work in progress.
  • Technical and Operational Issues: Frequent technical glitches, such as server downtime and authentication failures, disrupt the seamless transfer of benefits. Additionally, the dependency on Aadhaar for authentication has raised concerns about data privacy and security.

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Recommendations:

  • Enhancing Financial Inclusion: Strengthening the banking infrastructure in rural areas and promoting digital literacy can help bridge the financial inclusion gap. Initiatives like the India Post Payments Bank (IPPB) can play a crucial role.
  • Improving Digital Infrastructure: Accelerating the implementation of projects like BharatNet and ensuring reliable internet connectivity in remote areas is essential for the success of DBT.
  • Robust Monitoring and Evaluation: Establishing a comprehensive monitoring and evaluation framework to track the performance of DBT schemes and address operational challenges promptly.

Conclusion

While the DBT scheme has significantly improved the efficiency and transparency of the government's delivery system, it faces challenges that need to be addressed. Leveraging technology in governance, as seen in the success of the Unified Payments Interface (UPI) in revolutionising digital payments, can further enhance the effectiveness of DBT. Continuous efforts to improve financial inclusion, digital infrastructure, and robust monitoring mechanisms are crucial for realising the full potential of the DBT scheme

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