What is Direct Benefit Transfer

On January 1, 2013, Direct Benefit Transfer or DBT was adopted with the main purpose of improving the government’s delivery mechanism and redesigning the current technique in programs for welfare by enabling the transfer of funds and information quicker, safer, and decreasing the incidence of fraud.

The Direct Benefit Transfer Mission was established. The Planning Commission is the central focus of the Direct Benefit Transfer program execution. The Direct Benefit Transfer mission, however, was taken up by the Dept. of Expenditure. 

Types of Direct Benefit Transfer

Direct Benefit Transfer encompasses all welfare or subsidy programs operated directly or through implementing partners by the Government of India Ministries or Departments that include kind or cash benefit transfers to people. So, Direct Benefit Transfer encompasses the following sorts of schemes.

• Financial Transfer to Individual Beneficiaries

This category includes programs or parts of schemes where the government delivers monetary rewards to individuals. NSAP, MGNREGA, PAHAL, and other programs are examples. The following routes are used to send financial awards from the Ministry or Department to the recipients:

-The State Treasury Account pays the receivers directly.

-Via any authorized Implementation Agencies.

-The Central and State Governments would benefit.

• In-kind Transfer from Government to Individual Recipient

This component includes programs or parts of schemes where the government gives in-kind advantages to individuals via a middleman. Generally, the government or the agents accrues internal expenses to purchase goods for public distribution. It provides these services to designated recipients. So, these recipients are eligible to free or reduced-cost items or services.

The FCI or Food Corporation of India is a government body responsible for acquiring, shipping, storing, and handing out food grain to Fair Price Shops in the Public Distribution System (PDS). These then get delivered by the Food Corporation of India at government-subsidized rates. The fixed tariffs do not include the total economic cost of the Company.

The disparity is the Public Distribution System consumer subsidy which the Govt. of India pays to the Corporation. Likewise, the government bears internal costs in order to provide subsidies in-kind on a variety of commodities like kerosene, fertilizer, literature, pharmaceuticals, immunizations, etc. The example-filled matrix below depicts many sorts of schemes that get categorized according to the kinds of benefits plus the recipient kind.

• Different Transfers

The third type of transfer by the government to several authorities that are non-government help facilitates various government initiatives from start to finish. This category includes payments made to various government program facilitators, like non-government groups and community workers, in the sort of honoraria, bonuses, etc, in return for the programs’ successful implementation. Workers of ASHA below NHM, Workers of Aanganwadi below ICDS,  supported schools’ teachers, sanitation professionals in ULBs, plus others do not qualify as beneficiaries. They are, however, get compensated, taught, and recognized for their contributions to the community or beneficiaries.

The Operations of the Direct Benefit Transfer Scheme

One of the government’s significant achievements has been the Aadhaar number linking to the Direct Benefit Transfer system. The main purpose of the Aadhaar number linking is so that the government can leverage this relationship to make various payments. Also, it helps to ensure that the payment is delivered to the proper recipient. It also ensures that the funds are put immediately into the account of the beneficiary. Also, the government later said subsidies for LPG will not be offered to anybody earning more than INR.10 lacs per year.

Advantages of Direct Benefit Transfer

Several key advantages of Direct Benefit Transfer are as follows:

• The primary benefit of Direct Benefit Transfer is it eliminates fraud. So, funds are transferred by the government directly to beneficiaries. It will get sent directly to the bank account of the beneficiary.
• With the use of the Aadhaar no., the recipient’s identification may be enhanced. The government is in a position to recognize the recipient utilizing Aadhaar data in conjunction with their Aadhaar Direct Benefit Transfer status.

Transaction Fees for the Direct Benefit Transfer Program

The Finance Ministry handed down a decree on February 26, 2016, mandating all PAHAL or Pratyaksh Hanstantrit Labh or Direct Benefit Transfer transactions to be handled via  NPCI or National Payments Corporation of India. Banks get paid for their aid in simplifying the Direct Benefit Transfer process. The two types of commission available are listed below:

• Fee for the transaction: Each transaction is subject to an INR.0.50 cost as per the NPCI circular. NPCI, sponsor banks, and destination beneficiaries must all bear the fee.
• Incentives Cash-out: It includes a set fee of INR.5 for each transaction and variable pricing of INR.0.50 for each transaction of INR.100 for Pension Schemes, Maternity Benefits, and MGNREGA. The highest payment value for this charge is INR.5. The amount for the transaction is scaled to the nearest hundred. The basic purpose of offering incentives is for offering the eventual receiver with seamless financial services.

Direct Benefit Transfer Website

The government created a website (https://dbtbharat.gov.in/). This contains every of the scheme’s data. Authorities can view all federal and state welfare programs through the site. Any revisions or modifications in the plan will be communicated through the site. Recipients can also utilize the platform to get all relevant subsidies.

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Direct Benefit Transfer FAQs