The Direct Benefit Transfer DBT Mission Cabinet Secretariat DBT Mission Cabinet Secretariat 4th Floor, Shivaji Stadium Annexe, Rajiv Chowk, New Delhi - 110001 Website: hp://cabsec.nic.in/dbt/origin.html Vision “A governance regime which ensures a simple and user-friendly Government to People (G2P) interface and directly delivers entlements to eligible individuals and households in a fair, transparent, efficient and reliable manner.” Mission To facilitate a paradigm shi in the process of delivering entlements to all those who are eligible through: Ø Accurate idenficaon and targeng of the intended beneficiaries Ø Re-engineering government processes for simpler flow of informaon and funds Ø Promoon of Financial Inclusion Ø Seng up of digital plaorms that are accessible, scalable and reliable, providing user-friendly interfaces between the Government and the beneficiaries “ What is Direct Benefit Transfer (DBT)? Direct Benefit Transfer is a major reform iniave DBT is an aempt to ensure a beer and more launched by Government of India on 1st January, mely delivery of benefits to the people. This 2013 to re-engineer the exisng cumbersome marks a paradigm shi in the process of delivering delivery processes using modern Informaon and government benefits like wage payments, fuel Communicaon Technology (ICT). This programmes subsidies, food grain subsidies, etc. directly into aims to transfer benefits directly into the the hands of the beneficiaries, speeding up bank/postal accounts, preferably Aadhaar seeded, payments, removing leakages, and enhancing of accurately targeted beneficiaries. In a nutshell, financial inclusion. As depicted in the figure above, DBT intends to achieve: the DBT system through its customer-friendly 1. Electronic transfer of benefits, minimising processes ensures the last mile connecvity, levels involved in benefit flow allowing actual disbursements to take place at the 2. Reduced delay in payments doorstep of the beneficiaries through a network of 3. Accurate targeng of the beneficiary bank branches and Business Correspondents (BCs) 4. Curbing pilferage and duplicaon with micro ATM machines. Fig 1. Beneficiary’s Journey to DBT One-me Process Recurring Process t t es er es f e on, ts on ans a r al equisit w equisit T with a e-r ocess fits T fits Usag e-r Submission of Announcemen tlemen Announcemen pr of DB of pr and Digisa en and pr De-duplic Bene Withdr Bene Direct Benefit Transfer 6 Why DBT? The Central and the State government transfers and federal structure lead to further delays, thereby subsidies in India today stand at about 4% of India's creang space for various inefficiencies and Gross Domesc Product (GDP). Currently, these duplicaon of effort. Thus, subsidies and benefits transfers happen through mulple channels. In the which are needed for different secons of the process, the payment gets delayed and its intangible society require a well-targeted system of delivery value to the beneficiary reduces before it reaches which ensures mely transfer of benefits to the him or her. Schemes introduced in the past have cizens of the country. DBT will bring efficiency, oen struggled to achieve their goals due to ill- effecveness, transparency and accountability in targeng, leakages and ineffecve service delivery. the Government system and infuse confidence of These kind of delays and other hurdles leave a huge cizen in the governance. Thus, DBT entails leakage gap of 2% of GDP every year. Apart from leveraging modern technology and IT tools to this, the several levels of sancons within the realise the dream of MAXIMUM GOVERNANCE and MINIMUM GOVERNMENT. Fig 2. Why DBT Challenges Ÿ Delayed Payments Ÿ Leading to Inaccurate Targeng Target Beneficiaries leakages Ÿ Mulple Layers of Sancons Ÿ Beneficiaries across various Pension worth 2% of the Ÿ India's GDP, that Pilferage and Scholarship schemes, Fuel and Ÿ is 50% of total Duplicaon food subsidies, etc. subsidy outlay Results Ÿ Robust Beneficiary Targeng System Direct Benefit Ÿ Reduced Leakages Transfer – An Idea Ÿ Timely Transfer of benefits Whose Time Hs Come Ÿ Increased Financial Inclusion Ÿ Huge Savings Potenal Ÿ Minimum Government Maximum Governance Ÿ Increased Transparency and 20 cr Jan Accountability Dhan Accounts, more than 97 cr Enablers Aadhaar, 100 cr Ÿ mobile JAM Trinity connecons Ÿ BC Infrastructures Ÿ Payment Banks Ÿ Mobile Money Direct Benefit Transfer 7 Addionally, DBT through its direct and me-bound framework for electronic payments was laid down transfer system enables the governments to (vide O.M. dated 13.2.2015 and 19.2.2015) which transfer benefits using just an individual's bank is to be followed by all Ministries/Departments account number preferably linked through Aadhaar. and their aached Instuons/PSUs. These This Aadhaar number or the biometric input, being guidelines are also applicable to all Central Sector unique in nature, removes 'duplicates' and 'ghosts' (CS)/ Centrally Sponsored Schemes (CSS) and for from the government databases. With the help of a all schemes where cash component is transferred vast network of business correspondents, DBT will to individual beneficiaries. bring banking to the doorsteps of the rural poor who earlier did not have access to modern financial services. The ease of access shall also enable Role of DBT Mission beneficiaries to withdraw benefits from anywhere irrespecve of their status of migraon. Thus, DBT DBT Mission was inially created in the Planning will hugely empower the unbanked and accelerate Commission to act as the nodal agency for financial inclusion thereby ensuring end-to-end implementaon of DBT in government schemes. transparency of subsidy and transfer of benefits The Mission was transferred from Planning from the government to the beneficiaries. Commission to the Department of Expenditure, Ministry of Finance in July 2013. To give a further History of DBT fillip to the DBT process, DBT Mission and maers thereto have been placed in theCabinet As per the decision taken in the Naonal Commiee Secretariat under the administrave control of on DBT, DBT was rolled out in the country in 43 Secretary (Coordinaon & PG) with effect from districts, 24 selected Central Sector (CS) and 14.9.2015. Centrally Sponsored Schemes (CSS) in a phase-wise manner. Accordingly, DBT was launched in 20 DBT Mission has been entrusted with the districts on 1.1.2013 and 11 districts from 1.2.2013 responsibility of implemenng DBT in all and remaining 12 districts from 1.3.2013. The government subsidy/welfare programmes districts were idenfied on the basis of higher throughout the country. incidence of beneficiaries with bank accounts and where flow of funds was found to be relavely The work of DBT Mission entails studying exisng simpler. Resultantly, most schemes which were delivery process in welfare schemes and subsidies brought under the purview of DBT were related to and re-engineering the same to simplify process scholarships, women, child and labour welfare. and fund flow, providing policy intervenons, c o o r d i n a n g w i t h v a r i o u s In Phase II, DBT was further expanded across the Ministries/Departments, monitoring of DBT country on 12.12.2014 with 7 new scholarship Programme both at Central and State level, schemes, and modified DBTL for LPG subsidy and compilaon of data/informaon and preparing Naonal Rural Employment Guarantee Scheme progress reports on the status of DBT (300 districts) brought under its ambit. To implementaon. operaonalise DBT in government schemes, the Direct Benefit Transfer 8 Present Status of DBT Over the past three years, DBT has shown promising are withdrawing their benefits every month using results in pilot schemes being run in different parts Aadhaar biometric authencaon. As on 30th of the country. These include PAHAL (modified DBTL April, 2016, DBT Mission is monitoring data from for LPG subsidy), Public Distribuon System (PDS) in 15 Ministries/Departments on 66 government Puducherry, Chandigarh and Mahatma Gandhi schemes operaonal in the country. The number Naonal Rural Employment Guarantee Act of DBT transacons in the financial year 2015-16 (MGNREGA) payments in Jharkhand, Bihar, etc. The (upto January, 2016) has crossed 100 crore. More programme has already been universalised since than Rs 60,000 crore have been transferred to February 2015 and more than 29 crore beneficiaries about one fourth of the total populaon of the country. Fig 3. Current Status of DBT in India MGNREGA and NSAP schemes Total worth of the also shows impressive figures transacons cr 2,500 50,000 cr 1,200- Savings in schemes DBT transacons done in 116 cr . like PAHAL, DBT for food the last financial year - 2015-16 . (unl January 2016) . 15,000- 28,000 cr. Beneficiaries have been 29 cr. reached; that’s one-fourth DBT of the country’s populaon Total Number of Volume of Welfare Schemes Savings Beneficiaries Transacons Transacons In the current scheme of things, the potenal annum, respecvely. This huge amount, if saved, savings in programmes like PAHAL and DBT for Food can be ulised by the government in other ways to are pegged at around Rs 15,000 and Rs 28,000 crore improve cizen's confidence in governance. per annum, respecvely. In welfare programmes like MGNREGA and NSAP scheme, the savings amount to around Rs 1,200 and Rs 2,500 crore per Direct Benefit Transfer 9 Classificaon of Government Schemes/Components i) Cash Transfer to Individual Beneficiary - This not cover the full economic cost incurred by the category includes schemes or components of Corporaon. The difference represents the schemes wherein cash benefits are transferred consumer subsidy for the PDS, and is paid to the by Government to individual beneficiaries. Corporaon by the Government of India. Example PAHAL, MGNREGA, NSAP etc. This Similarly, Government incurs internal t r a n s f e r o f c a s h b e n e fi t s f r o m expenditures for provision of subsidies in kind on Ministry/Department to beneficiaries happens other products like kerosene, ferlisers, books, through different routes, as given below: medicines, vaccines, etc.