Direct Benefit Transfer (DBT) schemes, in vogue for some time in India now, have surfaced with renewed fervour over the last year and a half. DBT, as the term suggests, is a strategy aimed to electronically transfer price subsidies and benefits provided under various welfare schemes as cash directly into the bank accounts of beneficiaries.
The Economic Survey 2014-15 made a strong case for replacing various price subsidies and in-kind transfers with DBT schemes through the “JAM Trinity” (Jan Dhan–Aadhaar–Mobile) platform.
As per the Ministry of Finance website, by March 2015, 36 schemes, including that for LPG subsidy (also known as modified DBTL or PAHAL), had been brought under the DBT scheme. Several of these were already a cash benefit (such as various kinds of pensions, different types of scholarships, payments related to MGNREGA, etc.).
DBTL, on the other hand, is a product-linked price subsidy which is transferred to the beneficiaries’ bank account when they purchase cooking gas. Since then the ambit of DBT has been expanded to provide cash transfers in lieu of product-linked price subsidies such as for subsidies in agriculture as well as for in-kind transfer of food through the PDS, by the Centre as well as a number of tates.
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(The author is with Centre for Budget and Governance Accountability. She can be reached at malini@cbgaindia.org. Views expressed are personal.)