What is Direct Benefit Transfer (DBT)?

Few government initiatives have impacted Indians as the DBT scheme. Here is how it benefits all sections of society

The Direct Benefit Transfer (DBT) scheme came into effect on 1 January 2013. It was launched to enhance the Indian Government's delivery mechanism and reform existing welfare scheme procedures. The DBT scheme simplifies the transfer of benefits, such as subsidies, to the beneficiaries, making the process smooth, secure, and hassle-free.

What is the DBT scheme?

The DBT scheme helps the Government directly deposit subsidies into the beneficiaries' accounts. Earlier, the benefits were first transferred to an administrative authority, who would then distribute them to the beneficiaries. However, the DBT scheme removes the need for the middleman. The payment is made straight to a beneficiary by the Government.

Grants and sponsorships are two examples of such transfers. Individuals who avail of the DBT scheme can use a savings account to receive the benefit. A savings account can help secure your money whilst earning interest at the same time. You can open a savings account with any bank, including IDFC FIRST Bank. IDFC FIRST Bank allows you to open a savings account online using the mobile banking app. The process is easy, convenient, and fast.

How does the DBT scheme work?

The DBT scheme is valuable to the Indian Government as it improves transparency and productivity. It has helped deliver subsidies to over 43 crore beneficiaries, who have together received more than ₹1.40 lakh crore in their accounts.

The DBT process begins with the Government recognising the beneficiaries. Individuals in need or those who have contributed exceptionally to their fields are eligible for the benefit. Once the candidates have been recognised, their IDs are needed. However, this stage of the process is easy, as the Government has access to the Aadhaar card of every registered citizen of India.

With the help of the Aadhaar cards, the contact number and bank details of the beneficiaries are retrieved. After intimating the candidates on their selection, the funds are directly transferred to their bank accounts.

Benefits of the DBT scheme

The following are the key benefits of the DBT scheme:

• The DBT scheme prevents fraud. The Government sends the funds straight to the beneficiaries’ account, which removes the possibility of fraud through a middleman.
• The beneficiaries can be recognised with the use of their Aadhaar number. Because Aadhaar is a universal ID, the Government can easily verify the beneficiaries using their Aadhaar details.
• DBT promotes accountability in subsidy distribution. As a result, it aids in the elimination of inconsistency and delay in payments.
• DBT aids in the distribution of subsidies to deserving applicants living below the poverty level. It helps the Government reach out to the intended beneficiaries with ease.
• The scheme eliminates pilferage in the distribution of money and reduces the misuse of public funds.
• DBT is a powerful transaction and settlement technology that works with multiple organisations.
• DBT has proven to be an effective technique for connecting with people to distribute relief funds.

Subsidy breaches and delays have been reduced because of the Direct Benefit Transfer (DBT) scheme. These issues arose due to funding distribution through multiple channels and procedures. The Government of India re-engineered the old system to ensure that funds under social initiatives flow more quickly and correctly. It is a direct line of money distribution from the Government of India's treasury to beneficiaries' bank accounts. It ensures efficiency and efficacy in the system, helping the Government as well as the people of India.