What is Direct Benefit Transfer (DBT)?

Started on 1 January 2013, Direct benefit transfer (DBT) aims to restructure the process of transferring the benefits of the government schemes to the beneficiaries. DBT has reformed the traditional method to a process that is fast, simple and much more secure. It aids the government in plugging the leakage in transferring the benefits to the citizens by removing the intermediaries and duplicate/fake identities of the beneficiaries.

With DBT, we can expect the Government of India to develop a focused and an effective Social Security Net that will redefine the Government-to-People interface.Jan Dhan, Aadhaar and Mobile (JAM trinity) are the DBT enablers. As per DBT’s online portal, more than 22 crore Jan Dhan Account, more than 100 crore Aadhaar and 100 crore Mobile connections aid in implementing DBT across the country for various government schemes. DBT will help make transferring the scheme benefits to the beneficiaries effective, efficient and transparent. This will also make the government more accountable and instill the trust of the citizens in the governance.

DBT is not just limited to providing beneficiaries with cash transfers for various government schemes but also expands its scope to providing its beneficiaries with in-kind benefits.

It also extends transfers to the service providers and enablers with the scheme’s framework.

• Cash Transfer to Individual Beneficiary
  • Pension and Cash Benefits
  • Welfare schemes with a Cash Component
  • Subsidy Schemes
  • Stipends and Scholarships
  • Cash Awards
  • Example: PAHAL (Gas subsidy/ LPG Subsidy)

• In-kind Transfer to Individual Beneficiary
  • In-kind goods/ products
  • Training and Skills Development
  • Example: Mid-Day Meal and Public Distribution system

• Transfers to service providers/enablers within the scheme framework.
  • Payments to service enablers
  • Payments to third parties for providing services
  • Examples: Aanganwadi and NGOs

Following is the list of leading banks that offer a DBT account to its customers:

• Kotak Mahindra Bank
• Axis Bank Account

Here are some quick Fin.Nominal insights!

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• Advantages of DBT.
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