CHAPTER 5: Direct Benefit Transfer in INDIA

• The Direct Benefit Transfer (DBT) paradigm represents a quantum leap forward in terms of realising the stated vision of Fundamental Rights and State Policy Directive Principles.
• DBT strengthens Article 21 by efficiently and effectively implementing schemes to address issues such as income, opportunity, and resource inequalities, health, and securing the right to work and public assistance to those in need - all of which are elements of the Directive Principles of State Policy.

DBT Economics

• According to the Economic Survey 2015-16, growth must be accompanied by active government support in order to enhance the economic lives of the poor and vulnerable and achieve equity.
• It demonstrated that in several price subsidies provided by governments, rich households benefit more than poor households (for example, in the case of electricity, water, or fuel subsidies), and market distortions are created that ultimately harm the poor the most (for example, in the case of minimum support prices or railway passenger subsidies).
• It found that the advantage sought by price subsidies for the poor can be directly transmitted to the poor via lump-sum income transfers, avoiding the distortions caused by subsidies.
• Against this backdrop, the goal of transforming subsidies into DBT was set in motion, mediated by the Jan Dhan, Aadhaar, and Mobile Number (JAM) trinity.

What exactly is DBT?

• The DBT was originally envisioned as a mechanism in which the government's welfare subsidies are immediately credited to the bank or postal account of the precisely recognised beneficiary.
• DBT in India includes not just financial assistance but also in-kind transfers to qualifying beneficiaries, with over 300 Central and over 2000 State initiatives covered.
• Farmers' income support programmes such as the Pradhan Mantri Klsan Samman Nidhi (PM KISAN), pensions for the elderly, Divyangjan, widows, and others are well-known examples of cash assistance.
• Scholarships for the poor and other vulnerable groups are provided through the National Social Assistance Programme (NSAP), as are examples of in-kind assistance such as fertiliser subsidies, food grain support (Public Distribution System), mid-day lunches for schoolchildren, and the Pradhan Mantri Poshan Shakti Nirman.

The G20 Agenda and DBT

• The DBT is a wonderful example of Indian ingenuity that fits in well with this long-term objective.
• India is attempting to use G20 platforms to introduce the world, particularly the Global South, to the home-grown DPl-based DBT paradigm (PTI 2023).
• DBT also contributes to India's co-chairship of the Global Partnership for Financial Inclusion, a forum in which India seeks to promote "the development of an open, inclusive, and responsible digital financial ecosystem based on the presence of a sound and effective digital public infrastructure (DPI) for the advancement of financial inclusion."
• The G20 Anti-Corruption Working Group Meeting also featured DBT.