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Direct Benefit Transfer (DBT) was implemented on January 1, 2013, with the primary goal of enhancing the government’s delivery system and revamping the present method in welfare programs by making the flow of cash and information faster, more secure and reducing the number of frauds.

The DBT Mission was first created in the Planning Commission as the focal point for the execution of DBT programs. However, the DBT mission was taken over by the Department of Expenditure from July 2013 until September 14, 2015. Matters pertaining to the DBT Mission were transferred to the Cabinet Secretariat on September 14, 2015, under the Coordination & PG Secretary.

Direct Benefit Transfer Categories

The scope of DBT includes all welfare/subsidy programs administered directly or via implementing agencies by all Ministries/Departments of the Government of India, which entail cash/kind benefit transfers to individuals. As a result, the scope of DBT includes the following types of schemes.

  1. Financial Transfer to Individual Beneficiary 

This category contains programs or components of schemes in which the government transfers cash benefits to individual beneficiaries. For instance, PAHAL, MGNREGA, NSAP, and so on. This transfer of financial rewards from Ministry/Department to recipients occurs via the following routes:

-Directly to the recipients.

Beneficiaries are paid from the State Treasury Account.

-Through any designated Implementing Agency.

-The Centre/State Governments would be the beneficiaries.

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  1. In-kind

In-kind Transfer from Government to Individual Beneficiary – This category comprises programs or components of schemes in which the government provides in-kind benefits to people via an intermediary. Typically, the government or its agent incurs internal expenditure to buy products for public distribution and provide services to specified recipients. Individual recipients are entitled to these products or services for free or at a reduced cost.

For example, in the Public Distribution System (PDS), the Food Corporation of India (FCI) is the government entity in charge of procuring, transporting, storing, and distributing food grains to Fair Price Shops. The food grains are distributed by FCI at subsidized rates set by the government. The set rates do not cover the Corporation’s entire economic cost.

The difference is the PDS consumer subsidy, which is paid to the Corporation by the Government of India. Similarly, the government incurs internal expenses for the provision of in-kind subsidies on various items such as kerosene, fertilizer, books, medications, vaccinations, and so on. The matrix below, illustrated with examples, illustrates several types of schemes that may be classified based on the type of benefits and the type of recipients.

  1. Different Transfers 

Aside from these two types of schemes, there is another type of transfer from the government to various non-government officials who assist in the facilitation of various government programs all the way to the end. This category covers payments given to different facilitators of government programs, such as community workers and non-governmental organizations, in the form of honoraria, incentives, and so on, in exchange for the effective execution of the programs. ASHA workers under NHM, Aanganwadi workers under ICDS, teachers in assisted schools, sanitation personnel in ULBs, and so on are not beneficiaries themselves, but they are compensated, trained, and rewarded for their contribution to the beneficiaries/community.

Functions of DBT Scheme

The connection of the Aadhaar number to the DBT system is one of the government’s key accomplishments. The major goal of connecting the Aadhaar number is for the government to use this link to make all types of payments. It also aids in ensuring that the correct beneficiary receives the payment and that the money is deposited directly into the beneficiary’s account. The government has also recently stated that LPG subsidies will not be granted to persons with annual incomes over Rs.10 lakh.

Benefits of Direct Benefit Transfer

The following are the primary benefits of DBT:

  • The major advantage of DBT is that it prevents fraud. As a result, the monies are sent directly from the government to the beneficiary. The funds will be sent straight to the beneficiary’s bank account.
  • The identity of the recipient can be improved with the aid of the Aadhaar number. Because Aadhaar is a universal ID, the government would be able to identify the beneficiary using their Aadhaar data with Aadhaar DBT status.

Direct Benefit Transfer Scheme Transaction Charges

On February 26, 2016, the Ministry of Finance issued an order requiring all Pratyaksh Hanstantrit Labh (PAHAL) or DBT transactions to be processed through the National Payments Corporation of India (NPCI). Banks are compensated for their assistance in making the DBT procedure as simple as possible. The two forms of commission offered are as follows:

  1. Transaction fee: According to the NPCI circular, a fee of Rs.0.50 is imposed for each transaction. The charge must be shared by the NPCI, destination beneficiaries, and sponsor banks.
  1. Cash-out incentives: Pension Schemes, Maternity Benefits, and MGNREGA have a fixed charge of Rs.5 per transaction and a variable price of Rs.0.50 per transaction of Rs.100. This fee has a maximum payment value of Rs.5. The transaction value is rounded up to the next hundred. The primary goal of providing these incentives is to provide efficient direct financial services to the ultimate recipient.

Portal

The government has established a portal (https://dbtbharat.gov.in/) that has all of the scheme’s data. Administrators can use the portal to access all state and federal welfare programs. The portal will be updated with any modifications or changes to the plan. Beneficiaries can also use the portal to obtain all of the subsidies that are available to them.

DBT Scheme – FAQs

Q1. What does direct benefit transfer in banking mean?

The Government of India launched the Direct Benefit Transfer (DBT) initiative on January 1, 2013, with the goal of changing the system for delivering subsidies. This initiative attempts to immediately transfer benefits/subsidies from different social programs to people’s bank accounts.

Q2. What comes under DBT?

The scope of DBT includes all welfare/subsidy programs administered directly or via implementing agencies by all Ministries/Departments of the Government of India, which entail cash/kind benefit transfers to individuals.

Q3. What does NPCI for DBT mean?

NPCI – National Payments Corporation of India – DBT Scheme Codes

Q4. How to check a DBT balance?

When you receive DBT or make a transaction on your account, the bank will send you an SMS notice. You may also check your account balance via an ATM, micro ATMs/Bank Mitra, online banking, or by phoning the bank for data on your transactions.

Q5. What is the elegiility for DBT?

Benefits or subsidies will be immediately distributed to citizens living below the poverty level under DBT.

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