The DBT Story: Transforming Lives & Livelihoods, Saving Money



DBT, or Direct Benefits Transfer, was launched on January 1, 2013. Its main aims are to reform and transform the state’s delivery system by re-engineering the existing mechanisms. It seeks to transform the processes involved in programmes like welfare schemes, for example, and achieve two primary purposes:

  • Enable faster and easier flow of funds and information
  • Ensure accurate targeting of beneficiaries, de-duplication and reduction of fraud, preventing leakage and reducing the scope for middlemen to operate

The DBT Mission was born in the erstwhile Planning Commission, but it was transferred to the Department of Expenditure in July 2013 and continued to operate from there till September 14, 2015.

To give DBT more impetus, the current government moved the DBT Mission to the Cabinet Secretariat on September 14, 2015.

The logical conclusion of any financial inclusion initiative is the ability of governments to reach beneficiaries directly and transfer benefits. DBT, by itself, is just an idea. However, what gives it life is crores of bank accounts opened under Jan Dhan and crores of people holding Aadhaar cards for authentication.

JAM i.e. Jan Dhan, Aadhaar and Mobile are enablers for DBT with their enormous numbers offering unprecedented reach.

  • 31.42 crore Jan Dhan accounts
  • More than a billion Aadhaar holders
  • More than a billion mobile connections

In its first phase, DBT was initiated in 43 districts. Later, 78 more districts were added under 27 schemes, involving scholarships, women, child and labour welfare, etc. On December 12, 2014, DBT was further expanded nationwide. Seven new scholarship schemes and MGNREGA were brought under DBT in 300 identified districts with higher Aadhaar enrolment.

Today, DBT covers 437 schemes and 57 ministries, with a cumulative direct transfer of Rs 3,72,114 crore.

All Ministries and Departments, and their attached institutions and PSUs, are to follow the Electronic Payment Framework, laid down in February 2015. This is applicable to all Central Sector (CS)/ Centrally Sponsored Schemes (CSS) as well as to all schemes with cash components transferred to individual beneficiaries. The JAM trinity, consisting of Jan Dhan, Aadhaar and Mobile, have been enablers of DBT and DBT has, in turn, made scheme after scheme more accurate, efficient and leakage-free while also allowing the state to save a lot of money by the same means.

Below, we present the data on how DBT has grown over the years.

Figure 1: Rapid Increase in Number of DBT Beneficiaries

Figure 2: Increase in Amount Transferred to Beneficiaries

Figure 3: Increase in Number of Schemes Under DBT

If the data presented above is assumed to speak for itself, we have traced the expansion and extension of DBT over the years. The growth in DBT in the last four years appears to be particularly stark, especially in the last financial year which has seen a manifold jump across all the parameters above – number of beneficiaries, amount transferred to beneficiaries, and the number of schemes covered.

The numbers above would also say that DBT is perhaps achieving its intended objectives, with more and more people getting access to benefits and funds with minimum leakage and loss.

In the next section, we will look at how DBT has been transforming services and benefits delivery in the country, thereby transforming lives, as well as how it is saving money for the state, thereby transforming the country. For this purpose, we will look at news reports and analyses available in the public domain from the media.


In layman’s terms, DBT is an optimisation of the use of technology for meeting governance ends. As such, innovations in technology and, perhaps more importantly, the use of such technology in delivering benefits and services to citizens become key to also ensuring and meeting the ends of democracy. Access to quality and timely services, combined with access to information and transparency, tend to have a transformative and lasting impact on the uplift of standards and quality of life and living and also on the fight against corruption. The combination of all of the above, and much more, in an umbrella project is what we have been witnessing in Digital India. (But Digital India is not confined to benefits and funds transfer and includes all kinds of services and citizen convenience. Here, we will limit ourselves to DBT per se as we had set out to do.)

Let us next look at the impact of DBT on two counts – increase in payments (beneficiaries) and increase in savings (state).

Increase in DBT Payments:

It has been reported that there’s largescale increase in the distribution of benefits and subsidies via the DBT in fiscal 2018-19. For example, The Indian Express article ‘Narendra Modi government’s welfare payments: Massive 75 pct to be on DBT platform in FY 19’, published March 5, 2018, says that a massive 75% of benefits/ subsidies will be distributed by the DBT route in 2018-19.

The report also makes the following observation: “The Centre will have managed to make direct benefit transfer (DBT) payments — 80% in cash and the balance under in-kind schemes — of around Rs 1,50,000 crore in 2017-18, almost double the amount last year and 35% of its annual spending of Rs 4,00,000 crore on subsidies and various other doles.” As we have seen above, the actual total figure for DBT transfers in 2017-18 was more than Rs 1,89,171 crore.

Zee Business made a similar observation in its report ‘Central schemes excel through DBT, transfer Rs 84,998 crore in FY18’, published December 28, 2017, where it stated: “The data released on its official homepage stated that total transaction under DBT reached an all-time high of Rs 84,988.01 crore – rising by 13.77% on yearly basis.”

The total number of transactions for fiscal 2017-18, according to stood at more than 181 crore.

Both the articles mentioned above show that the DBT mode of transfer has become an efficient and easy way of transferring benefits for the state — and the manifold increase in payments through this route is a clear reflection of the trend as to how DBT is reaching more and more people and ensuring they get what is due to them.

Increase in Savings:

The DBT mode cuts out middlemen and excessive paperwork, which results in saving taxpayers’ money too as far as the state treasury is concerned. A lot of this money would be lost earlier due to leakage. This improvement in the system and increase in savings has been repeatedly covered in the media in news reports and analyses. For instance, an article by Aman Sharma in The Economic Times titled ‘Savings from direct benefit transfer pegged at Rs 83,000 crore’, published March 23, 2018, talked about the overall savings amounting to Rs 82,985 crore because of DBT.

This can be contrasted with how things used to be under earlier governments, especially when we recall the scams and monetary loss for the exchequer that made frequent headlines in the years just before the change of government in May 2014.

Another article in the same publication, ‘DBT helps states save Rs 1,557 crore till November 2017’, written by Vasudha Venugopal and published November 10, 2017, reported that till November 2017, states and Union territories reported savings of Rs 1,557 crore due to the implementation of DBT-enabled schemes.

If we go back a little more than a year, an earlier article in The Economic Times — ‘Direct Benefit Transfer leads to Rs 50,000-crore savings for government in 3 years’, published February 20, 2017 – had reported that, as of December 31, 2016, savings due to DBT over the last three years had touched Rs 50,000 crore. Thus, comparing this with the latest figures on savings, we can see how DBT has been steadily increasing savings and making leakage and corruption things of the past on a yearly basis.

Fake LPG Connections:

To continue with the subject of savings and plugging leakage and corruption, an article in The Asian Age — ‘Direct cash transfer cancels 3.3 crore fake LPG connections’, published February 8, 2017 — reported that around 3.3 crore fake LPG connections had been blocked after DBT was implemented, leading to savings of about  Rs 21,000 crore in subsidies.

Aadhaar & Leakage:

The linking of Aadhaar with the mechanism has evidently been a game-changer. It has led to huge savings by plugging leakage from government funds. The Times of India report ‘Aadhaar helped plug Rs 27,000 crore leakage in FY16’, published May 11, 2016, talked about how the usage of Aadhaar for DBT had led to savings across several government welfare schemes, including Rs 27,000 crore in PDS, LPG distribution and MNREGS.


Another article in The Times of India ‘DBT brings big benefits’, published May 11, 2016, covers all aspects of how DBT was resulting in savings across several schemes, by weeding out duplicate beneficiaries.

Praise from CVC:

As a result, Central Vigilance Commissioner K.V. Chowdary had lauded the DBT method in ensuring corruption-free transactions in the state of Andhra Pradesh, while addressing the gathering at the Vigilance Awareness Week observed at Ghantasala, as reported in The Hindu on November 6, 2016.


We began this article by looking at the government’s vision in extending the use of DBT to the transfer of benefits and funds. We also saw how DBT has steadily expanded in terms of number of beneficiaries and amount transferred as well as the coverage of more and more schemes under it. This is not just a transformation of this technology-enabled mechanism that has happened during the tenure of the present administration but it is also evidence of how transformative DBT has been where people’s lives and livelihoods are concerned. The numbers certainly speak for themselves. (One interesting point to note is how news and activity around DBT seems to have spiked after the transfer of the DBT Mission in September 2015.)

But on top of the data, the news reports and analyses we have cited above also serve as evidence of how this transformation – and steady improvement – has taken place over the last few years. For instance, we have seen how the amount transferred under DBT has steadily increased as has the amount of savings. DBT today is an almost transparent and the perhaps the most effective means of funds and benefits transfer. It is funding the unfunded and banking the unbanked without any undeserving party running away with someone else’s money in the middle. It is also saving taxpayers’ money by utilising it properly by above all ensuring that it is reaching the right beneficiaries.

  • Mukesh Kamath

    Aadhaar linked dbt is essential since the 121 crore beneficiary number looks suspect and has double counted many beneficiaries. Overall article is accurate but nothing new to an informed enthusiast of DBT like me.