What is a Direct Benefit Transfer (DBT) Scheme and How Does it Work?
The DBT Scheme or Direct Benefit Transfer Scheme is an attempt to transform the mechanism of subsidies. The Indian Government introduced the DBT scheme on 1st January 2013. The goal and vision behind the scheme’s evolution were to establish a Giro System to transfer subsidies or funds directly to the people through linked bank accounts. The DBT Scheme strives to minimize delays, duplicities, and leakages while enhancing transferability and accountability.
The direct benefit transfer is another act of the Indian Welfare Project that initially started in 43 districts. Later, 78 districts were further included along with 27 other schemes that supported various causes, including labor welfare, women, children, and scholarships. In December 2014, the DBT Scheme was further expanded and is now present in over 300 districts, with 7 new scholarships and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The DBT Scheme is a very focused and important project that the Indian Government has launched, and it sees continuous improvement and expansions.
What is a Direct Benefit Transfer Scheme?
The mechanism that directly transfers the subsidy amount while also making other transfers into the account of beneficiaries directly, instead of providing it to government authorities, is called direct benefit transfer. In saying so, the transfer can be thought of as the payment made by the government directly to the beneficiary without any returns. Furthermore, the beneficiaries know the importance of maintaining a bank account. The most common examples of direct benefit transfers include subsidies and scholarships.
How Does the DBT Scheme Work?
The direct benefit transfer is a focused project that the Indian Government Has undertaken to improve transparency and productivity of the transfer of subsidies. The undertaking has enabled the delivery of subsidies to over 43 crore beneficiaries across the country and has together received approximately Rs 1.40 lakh crore in their accounts.
The direct transfer process’s initial step begins with the Government recognising the beneficiaries. Those who have contributed significantly in their respective fields or are simply in need are eligible for the benefit. The verification stage of the process is quick and simple as the Government has access to the Aadhaar card of candidates to recognize their registration as a citizen of India. Upon candidate recognition by the Government authorities, ID proof is required for verification.
As the Aadhar cards are linked to the respective bank accounts of the beneficiaries, the bank details are easily retrieved. After proper intimation, the funds are directly transferred to the accounts of the beneficiaries.
Also Read: Telegraph Transfer (TT): Working, Role and Benefits
What is the Process of Direct Benefit Transfer?
The process of direct benefit transfer has a few simple steps. Anyone who has contributed significantly in their respective fields or is simply in need can be a beneficiary. The steps of the process of direct benefit transfer include:
- Step 1: Preparation steps are done to ensure that the right candidates are chosen.
- Step 2: The candidates are asked to register on the Public Financial Management System (PFMS) portal or simply use an application.
- Step 3: A database of the beneficiaries is curated.
- Step 4: The verification and accuracy of all the details relevant to the beneficiaries are double-checked.
- Step 5: The payments to be made are determined.
- Step 6: A feedback loop is created.
Features and Benefits of Direct Benefit Transfer Scheme
Direct Benefit Transfer has several monetary pros that can be availed upon applying. The key features of the DBT Scheme are:
- DBT The DBT Scheme swiftly removes the need for intermediaries, including government authorities, to directly shift the subsidy amount into all beneficiary accounts.
- It promotes transparency and accountability while reducing the instances of pilfering from the distribution of Government-sponsored monetary funds.
- DBT Scheme allows the transfer of funds seamlessly while targeting the right beneficiaries.
- Beneficiaries can link only a single account with the Aadhaar to avoid duplication of subsidies.
- It enables the authorities to reach out to the candidate and beneficiaries simultaneously.
- The DBT scheme is extremely secure. It minimizes the risk of robbery and fraud. As it uses the direct transfer of funds, the middle man is eliminated, reducing the risk of theft.
- DBT is a brilliant settlement technology that is easily compatible with multiple organizations.
- DBT also helps in the distribution of subsidies to deserving applicants, especially those who are below the poverty level.
The Government of India has reformulated and revolutionized the old system to guarantee the funds under social initiatives for better flow and accuracy. Furthermore, it ensures the efficiency of the overall system and process while benefiting the citizens and the government. Subsidy breaches or delays are significantly minimized due to the secure design of the Direct Benefit Transfer (DBT) scheme.
Types of Schemes Covered in Direct Benefit Transfer
There are different schemes under the DBT Scheme. These include:
1) Cash Transfer
The cash transfer scheme is rather simplistic. It involves the transfer of the subsidies directly to the beneficiaries from the government. The following methods can be used for the transfer of cash:
- Direct transfer into the beneficiary account.
- Use of the State treasury to transfer cash to the beneficiary.
- Government-appointed agencies make transfers.
- The State or Central Government makes cash transfers.
2) In-Kind Benefit Transfer
In-kind benefit transfer is a transfer that provides benefits to the candidates directly or through some appointed third-party agency. The Government takes care of all the expenses incurred while procuring the benefit or subsidy. For example, the Government will buy a certain product and offer it to the public.
3) Other Transfers
Apart from the cash and kind transfers, the DBT Scheme also allows transferring funds or subsidies to different non -governmental functionaries that enable the implementation of different government policies until the end. It includes all community workers, teachers in aided schools, NGO workers, etc. Such members are not beneficiaries but are still provided with training, wages, food, etc.
Direct Benefit Transfer Portal
The government of India has recently launched an online portal that contains all the details of the Direct Benefit Transfer Scheme along with the necessary instructions for the candidates. The available funds and subsidies are also clearly marked and shown in detail on the portal for easy access to all citizens. Every single state and central welfare scheme can easily be accessed on the portal by administrators at any point. All necessary updates and changes are also constantly modified on the portal, keeping it up to date.
Things to Remember about Direct Benefit Transfer Scheme
The DBT scheme is simple and beneficial. All you need to remember is:
- Apply for a bank account.
- Make sure that your bank account is linked to your Aadhar Card.
- Check to see if your Aadhaar card is not linked to multiple accounts.
- Continuously check the portal for updates regarding the changes in schemes.
Also Read: A Complete Guide On How To Transfer Money From Credit Card To Bank
Final Word
The DBT Schemehas helped mainly in serving those in need. The ability of the Government to serve its people with monetary funds by minimizing the risk of theft and fraud has been achieved through the merit of this scheme. Distributing subsidies to the beneficiaries occurs seamlessly by eliminating the middleman.
FAQs on Direct Benefit Transfer Scheme
Ans: The National Payment Corporation of India uses Aadhar number as the key for enabling transfers directly into the beneficiary’s bank account. It further serves as a verification document that is used to map all the information regarding the candidate for seamless transfer.
Ans: Yes, the government has launched a new portal that contains all relevant information about the DBT Scheme.
Ans: It is designed to provide monetary funds for those in need or those who have contributed significantly in their respective fields.
Ans: Yes, Aadhaar Card is mandatory for DBT.
Disclaimer
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
