Daily News Analysis

CHAPTER 5: Direct Benefit Transfer in INDIA

stylish_lining
  • 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.

Conclusion

It is one of India's most significant contributions to the discourse in G20 discussions because of the far-reaching contemporary implications of, and the possibility of future improvements in, India's DBT paradigm. It certainly has the ability to foster harmony within our "One Family" while also inspiring hope for our "One Future."

 

International Year of the Woman Farmer

The United Nations General Assembly's declaration of 2026 as the International Year of the Woman Farmer marks an important milestone in recognizing the pivotal role women play in global agricu
Share It

Mental Health Coverage in India

India has made significant strides in integrating mental health treatment into its health insurance policies, following the Mental Healthcare Act, 2017 and the IRDAI directive, which now mandates
Share It

India and EU

The recent UK-EU agreement presents a Eurocentric framework that primarily benefits European integration but also holds substantial implications for India in terms of both opportunities and challe
Share It

Paris Agreement

India’s progress on its climate commitments under the Paris Agreement has been commendable, with significant achievements in areas like non-fossil fuel capacity, carbon sinks, and emissions
Share It

cooperative and fiscal federalism

India’s journey toward cooperative and fiscal federalism over the past decade has resulted in significant changes in the relationship between the Centre and state governments. The shift towa
Share It

The Evolving Landscape of Warfare

The recent asymmetric strike by Ukraine, Operation Spiderweb, which involved long-range drone assaults on Russian air bases, offers critical insights into modern warfare. This operation not only h
Share It

India-Maldives

India’s Prime Minister’s participation as the guest of honor at the 60th Independence Day celebrations of the Maldives represents a significant reset in bilateral relations, offering a
Share It

Insolvency and Bankruptcy Code (IBC)

The Insolvency and Bankruptcy Code (IBC), which was introduced in 2016, was designed to streamline and strengthen India’s insolvency resolution process. However, recent developments suggest
Share It

Bay of Bengal

India’s maritime ambitions in the Bay of Bengal are central to its geopolitical and economic strategies, but there are several challenges that need to be addressed to strengthen its leadersh
Share It

The Great Nicobar Project

The Great Nicobar Project is a massive infrastructure overhaul that has emerged as a focal point for India’s strategic and developmental ambitions. Piloted by NITI Aayog, the project is valu
Share It

Newsletter Subscription


ACQ IAS
ACQ IAS