Subject: Social Justice

Direct Benefit Transfer (DBT) represents a transformative shift in welfare delivery, leveraging technology to ensure transparent and efficient distribution of benefits to intended beneficiaries. The scheme has shown remarkable progress in reforming India's social security architecture through digital innovation.

Advantages of DBT System

• Enhanced Financial Inclusion: Integration with Jan Dhan-Aadhaar-Mobile (JAM) Trinity has expanded banking access to marginalized sections, promoting digital literacy and financial independence.

• Reduced Leakages: The scheme has generated cumulative savings of ₹3.48 lakh crore by eliminating ghost beneficiaries and reducing corruption in welfare programs.

• Improved Targeting: The beneficiary coverage has increased 16-fold from 11 crore to 176 crore by 2023-24, ensuring benefits reach the intended recipients.

• Fiscal Efficiency: Reduction in subsidy allocations from 16% to 9% of total government expenditure, demonstrating better resource utilization.

Limitations and Challenges

• Digital Divide: Limited access to technology and banking infrastructure in rural areas creates barriers for vulnerable populations.

• Infrastructure Gaps: Poor internet connectivity and inadequate banking infrastructure in remote regions hamper smooth implementation.

• Financial Literacy: Lack of awareness about digital transactions and banking procedures among beneficiaries affects optimal utilization.

• Exclusion Errors: Biometric authentication failures and technical glitches can lead to denial of benefits to legitimate beneficiaries.

Way Forward

• Infrastructure Development: Strengthening digital and banking infrastructure through initiatives like Bharatnet and Banking Correspondent Network.

• Capacity Building: Regular training programs for beneficiaries and local administrators to enhance digital literacy.

• Grievance Redressal: Establishing robust mechanisms to address technical issues and authentication failures promptly.

The success of DBT in delivering welfare benefits directly while generating significant savings demonstrates its potential as a game-changing reform. However, addressing its limitations through technological upgradation, infrastructure development, and capacity building is crucial for achieving its full potential. The integration with initiatives like Digital India and Financial Inclusion programs will further enhance its effectiveness in transforming service delivery.