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Published: Feb 28, 2023
Updated: Feb 28, 2023

Direct Benefit Transfers Worth Rs 5.5 Trillion Expected This Fiscal Year, Exceeding Last Year's Rs 6.3 Trillion

India's Direct Benefit Transfer (DBT) program is expected to provide subsidies and sops worth about Rs 5.5 trillion by the end of the current financial year, which is almost equal to the entire amount transferred in the previous fiscal year, FY21, and just 13% less than in FY22. The DBT system involves the transfer of subsidies directly to the beneficiaries, with the aim of reducing leakage and promoting transparency in the delivery of welfare schemes.

Fertiliser Subsidies for Farmers

Farmers have been provided with fertiliser subsidies worth Rs 1.9 trillion so far in the current financial year. This is 53% higher than the amount provided in the entire FY22, due to an increase in input costs and global prices of fertiliser over the past year. With two months still left in the fiscal year, the total fertiliser subsidy to farmers is expected to be substantially higher than what has been reported so far. The Centre's estimated fertiliser subsidy bill for FY23 is Rs 2.25 trillion, as compared to the budget estimate of Rs 1.05 trillion and the actual amount of Rs 1.54 trillion in FY22.

Subsidies for Foodgrains under PDS

Subsidies worth Rs 1.5 trillion have been transferred to beneficiaries via foodgrains under the Public Distribution System (PDS) so far in FY23. This is expected to rise to around Rs 2.2 trillion by the end of the fiscal year, the same as in FY22. The increase in food DBT was due to the free grains scheme.

DBT for PMAY-R Beneficiaries

The government's assistance for beneficiaries under the Pradhan Mantri Gramin Awas Yojana-Rural (PMAY-R) in FY23 is expected to exceed the FY22 achievement of about Rs 40,000 crore. So far in the current fiscal year, DBT in PMAY-R has reached Rs 38,638 crore.

Aadhaar-enabled DBT Platform

The jump in DBT from FY19 onwards was largely due to the increased use of Aadhaar-enabled DBT platforms for in-kind food and fertiliser subsidy distribution. The Aadhaar-enabled DBT platform helped eliminate 41.1 million fake LPG connections, 39.9 million duplicate ration cards, and resulted in 10% savings on wages by deleting non-existent MGNREGA beneficiaries.

Programme successful in reducing leakages through targeted deliveries

India's DBT system has enabled the government to save significantly on its social-sector welfare expenditure through targeted deliveries. The DBT program has been successful in reducing leakages and ensuring that the benefits reach the intended beneficiaries. The program has also been effective in eliminating fake connections and reducing duplicate beneficiaries, resulting in substantial savings for the government. With the expected increase in the DBT transfers this fiscal year, the program is likely to further strengthen India's social welfare initiatives.