Direct Benefit Transfer

Direct Benefit Transfer or DBT is an attempt to change the mechanism of transferring subsidies launched by Government of India on 1 January 2013. This scheme or program aims to establish a Giro system to transfer subsidies directly to the people through their linked bank accounts. It is hoped that crediting subsidies into bank accounts will reduce leakages, duplicity and delay and the new processes will increase transparency and accountability.

While initial DBT implementation has solved certain delivery issues and met some of its objectives, it has created a new set of concerns to be dealt with. For the successful implementation of DBT, beneficiaries were made aware of the importance of creating and keeping a bank account. Nationwide financial literacy and financial inclusion schemes such as PM's Jan Dhan Yojana (PM's People's Wealth Scheme) launched in August 2014 and the JAM Yojana, that is the bank-mobile-identification trinity, were started to this effect. Literacy and social issues also impact the beneficiary. Tracking deposits, reading SMS notifications, knowing the correct amount of money that is owed, ensuring that the correct amount has been deposited, and mobility are some barriers faced by female beneficiaries in rural areas.

In the 1980s, Prime Minister Rajiv Gandhi had stated that only 15 paise out of every rupee spent reaches the poor. In this context the Modi government has stated that now every paisa, aided by direct transfer, reaches the intended beneficiary.