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  • 09 December, 2022

  • 7 Min Read

Direct Benefit Transfer Scheme

Direct Benefit Transfer Scheme

The majority of economists advocate converting all agricultural subsidies into direct income support, also known as Direct Benefit Transfer to Farmers.

What is the Direct Benefit Transfer Scheme?

  • Aim: It is envisioned as a tool to help with the simpler/faster flow of information and funds to beneficiaries, as well as to reduce fraud in the delivery system.
  • Implementation: It is a mission or initiative launched by the Indian government on January 1, 2013, to reform the government delivery system.

  • The Central Plan Scheme Monitoring System (CPSMS), an earlier version of the Office of Controller General of Accounts' Public Financial Management System (PFMS), was chosen to serve as the common platform for Direct Benefit Transfer routing.
  • Beneficiary Account Validation System, a robust payment and reconciliation platform integrated with the Reserve Bank of India (RBI), National Payments Corporation of India (NPCI), Public & Private Sector Banks, Regional Rural Banks, and Cooperative Banks (core banking solutions of banks, RBI settlement systems, NPCI Aadhaar Payment Bridge), and others are primary components in the implementation of DBT schemes.

DBT Schemes: There are 310 DBT Schemes from 53 Ministries. Some of them are:

What are the Advantages of DBT?

Service Coverage Has Been Expanded:

  • In a mission-mode approach, it attempted to open bank accounts for all households, expanded Aadhaar to all, and expanded banking and telecom service coverage.
  • It established the Aadhaar Payment Bridge to enable instant money transfers from the government to people's bank accounts.
  • This method not only enabled all rural and urban households to be uniquely linked under various government schemes for receiving subsidies directly into their bank accounts, but it also enabled them to transfer money with ease.

Financial Assistance:

  • In rural Bharat, DBT has enabled the government to provide effective and transparent financial assistance to farmers with lower transaction costs, whether for fertilisers or any of the other schemes.

Transfer of Funds and Social Security:

  • The PM Awas Yojana and LPG Pahal schemes in urban India successfully use DBT to transfer funds to eligible beneficiaries. The DBT architecture is used to provide social security through various scholarship programmes and the National Social Assistance Programme.
  • DBT under rehabilitation programmes such as the Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS) opens new frontiers for social mobility for all segments of society.

What are the Problems with DBT?

Lack of Accessibility:

  • One of the most common problems encountered by citizens attempting to enrol is a lack of accessibility/proximity to enrolment points, the absence or erratic availability of officials/operators in charge of enrolment, and so on.

Lack of Facilities:

  • Many rural and tribal areas continue to lack banking services and road connectivity. There is also a need for financial literacy, which would raise people's awareness.


  • Delays in accepting and advancing applications. The required documentation is difficult to obtain, and errors/issues are discovered.

Disruption in the Process:

  • When it comes to receiving money in their bank accounts via DBT, one of the most common issues is payment schedule disruptions.
  • Disruptions could be caused by spelling mistakes in Aadhaar details, pending KYC, frozen or inactive bank accounts, mismatches in Aadhaar and bank account details, and so on.

Beneficiaries are scarce:

  • Various Direct Benefit Transfer (DBT) schemes, such as the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), the Telangana government's Rythu Bandhu, and the YSR Rythu Bharosa of Andhra Pradesh, do not reach tenant farmers, i.e., those who cultivate on leased land.

Way Forward

Systemising Innovation:

  • Empowering innovation systems are some of the aspects that will require ongoing attention.
  • This would help India meet the diverse needs of its population while also ensuring balanced, equitable, and inclusive growth.


  • There is an urgent need to improve citizens' access to enrolment points across schemes, particularly in rural and peri-urban areas.

A Body for Everyone:

  • A centralised grievance redress cell for all DBT schemes at all tiers — state, district, and block — to assist beneficiaries in resolving issues.


  • It can assist both tenant and reverse-tenant farmers in operating consolidated holdings while allowing owners to pursue non-agricultural employment without fear of losing their lands.

Source: The Indian Express

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