Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step,…

Question

Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment.

Ghissu Editorial · Accepted Answer

Direct Benefit Transfer is a progressive reform that has cut leakages and sped up welfare through the JAM trinity, but authentication failures, inclusion errors and last-mile banking gaps limit it. A 2025 BlueKraft Digital Foundation study cited by PIB puts its savings at about ₹3.48 lakh crore.

**Introduction**

Direct Benefit Transfer (DBT), launched on 1 January 2013 and scaled through the JAM trinity of Jan Dhan, Aadhaar and mobile, pays benefits straight into bank accounts. It has reformed welfare delivery, but not without limits.

**DBT as a Progressive Reform**

1. **Plugging leakages**: Removing intermediaries and ghost beneficiaries saved about ₹3.48 lakh crore, as per a 2025 BlueKraft Digital Foundation study cited by PIB.
2. **Speed and dignity**: PM-KISAN credits ₹6,000 a year to farmers in three instalments without middlemen, and cash lets households decide their own priorities.
3. **Scale with traceability**: PAHAL, the LPG subsidy transfer, entered the Guinness World Records in 2015 as the largest cash transfer programme, with every payment traceable.

**Limitations That Remain**

SKETCH: forcefield | DBT as Delivery Reform
center: DBT delivery
driving: JAM trinity, Leakage cut, Faster credit
restraining: Authentication failure, Last-mile banking, Inflation erosion

1. **Exclusion by technology**: Aadhaar authentication failures deny benefits, as Santoshi Kumari's 2017 hunger death in Jharkhand showed, and mandatory Aadhaar-based MGNREGA wage payment from 2024 raised fears for unlinked workers.
2. **Inclusion errors**: RTI data in 2021 showed about ₹1,364 crore of PM-KISAN money paid to over 20 lakh ineligible beneficiaries.
3. **Last-mile banking**: Remote and elderly beneficiaries lose a day's wage travelling to withdraw small sums.
4. **Cash is not a service**: A transfer cannot buy a missing school or clinic, and fixed cash loses value to inflation.

**Conclusion**

DBT is a progressive step because it makes welfare faster, cleaner and traceable. Yet only offline fallbacks, quick grievance redress and stronger public services alongside cash will make it truly inclusive and a tool of Antyodaya.

Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment.

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