Direct Benefit Transfer System’s Achievements

April 18, 2025

India’s Direct Benefit Transfer (DBT) system has revolutionised welfare delivery since its inception in 2013. By 2025, it has achieved remarkable efficiencies, saving Rs 3.48 lakh crore and halving subsidy allocations. The system has expanded from 11 crore beneficiaries to 176 crore. This growth marks the importance of transparency and digitisation in welfare governance.

Fiscal Optimisation Through DBT

DBT has optimised fiscal resources . Despite an increase in welfare budgets from Rs 2.1 lakh crore in 2009-10 to Rs 8.5 lakh crore in 2023-24, subsidy allocations decreased from 16% to 9% of total expenditure. This demonstrates how DBT enhances budgetary efficiency while expanding coverage.

Sectoral Impact of DBT

Food subsidies have seen the most substantial impact, accounting for 53% of total savings, approximately Rs 1.85 lakh crore. Other programs like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) have also benefited. MGNREGS achieved 98% timely wage transfers, while PM-KISAN generated Rs 22,106 crore in savings through the elimination of ineligible beneficiaries.

Enhanced Targeting and Accountability

The integration of Aadhaar-linked authentication has been very important. It has effectively eliminated ghost beneficiaries and ensured that subsidies reach the intended recipients. This enhanced targeting has expanded the coverage of welfare programs while maintaining accountability.

Welfare Efficiency Index (WEI)

The Welfare Efficiency Index (WEI) has risen from 0.32 in 2014 to 0.91 in 2023. This index quantifies the systemic improvements achieved through DBT, measuring savings, subsidy reductions, and beneficiary growth. It serves as a replicable model for evaluating welfare reforms globally.

Future Directions for DBT

To maintain momentum, DBT coverage should be expanded to include remaining subsidy schemes. Strengthening digital infrastructure is crucial, particularly in rural areas, to bridge inclusion gaps. The use of advanced analytics, particularly AI for fraud detection, will further reduce leakages. Additionally, robust grievance redress mechanisms are essential to ensure that no beneficiary is excluded.

Challenges Ahead

Despite its successes, challenges remain. The digital divide between urban and rural areas poses barrier to equitable welfare governance. Continuous innovation is necessary to combat evolving fraud tactics and to ensure that the system remains efficient and inclusive.

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