Direct Benefit Transfer Scheme

Direct Benefit Transfer Scheme – Strategic Action Plan for India in 2014

The Government from time to time has introduced a plethora of welfare schemes involving, inter alia, provision of subsidy or subsidized goods for the socio-economic upliftment of poor in the country. However, numerous surveys and studies reveal that subsidized goods and welfare benefits have not been reaching to intended beneficiaries.

The system of providing subsidies under various schemes of the Government has proved to be inefficient. The Central Government spent Rs.2.16 lakh crore on subsidies during 2011-12 accounting for 2.41%of country’s GDP. The budget for the year 2012-13 proposed disbursal of subsidies amounting to Rs.1.9 lakh crore. ] Government expects to reduce the cost and subsidy bill through better targeting. Union budget 2012-13, targets subsidies below 2% of GDP and below 1.75% of GDP in the next three years.

It is in this context, this article briefly highlights the scheme, its benefits, Government’s initiatives and strategic action plan to complete the task in three years focusing on productively utilizing existing institutional infrastructure, creating awareness, resolving pressing issues, among others

Scheme: The Direct Cash / Benefit Transfer scheme provides for direct transfer of money into the bank accounts of eligible persons for pension, scholarship, payments under the Employment Guarantee Scheme and benefits/subsidies under other Government welfare programs. This can facilitate beneficiaries to use this money to buy goods and services in quantity and of quality from the market at competitive prices. Under the scheme the difference between the market price and subsidized price is directly transferred to the beneficiary in cash in proportion to the quantity uplifted from the market.

The scheme depends upon basic two requirements viz.Aadhaar, the Unique Identification (UID) Number and Bank Account. Aadhaar is a 12-digit individual identification number issued by...