Answer:
Direct Benefit Transfer (DBT) was launched in 2013 with the aim of reforming the government delivery system by re-engineering the existing process in welfare schemes for simpler and faster flow of information/funds and to ensure accurate targeting of the beneficiaries, de- duplication and reduction of fraud. It transfers government benefits directly into the Citizen’s Aadhar-seeded bank accounts for targeted delivery of the benefits.
Impact of DBT on the effectiveness and transparency of welfare schemes for the vulnerable sections in India:

• Efficient transfer of Government benefit: By using DBT, the intended benefit is directly transferred to the accounts of the beneficiaries, cutting down the middle administrative layers that were delaying the process of transfer earlier. For example, DBT to landholding farmers under PM Kisan Samman Nidhi Yojana.
• Wide coverage of schemes: According to the DBT Mission’s status report, DBT has expanded from a mere 24 schemes (as part of a pilot Programme) in 43 districts in 2013 to over 300 Central schemes across India by December 2022.
  • For example, the Government of India has transferred $312 billion to beneficiaries (nearly 65% of the vulnerable population) under its various social security schemes since the start of the DBT in 2013.
• Ensure financial inclusion: DBT comes with the prerequisite of a compulsory Aadhaar linked Savings account and this brings the beneficiary into formal economy and introduces him/her to the banking system. For example, women hold 56% of over 46 crore Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
• Increases the transparency & accountability: The intended amount for the welfare scheme and its movement can be tracked to and forth thereby providing more accountability.
• Reduces Corruption: DBT helps in reducing the interactions between the beneficiary and officials, thereby reducing the possibility of bribe and corruption. For example, India saved over USD 27 billion in key central government schemes through direct benefit transfer.
• Reduces the ghost beneficiaries and reduced leakage: The Aadhaar integrated transfer mechanism with biometric authentication helps to remove the ghost beneficiaries existing in the system, as multiple or fake entries can easily be mapped. As a result of which the government has been able to target the genuine and deserving beneficiaries.
• Real time tracking: Public Financial Management System (PFMS) provides real time utilization of funds released from the consolidated fund of India. It has been designed in a way to meet complete end to end requirements of accounting and fund management.

Notwithstanding its success, the program still faces hurdles like:

• Lack of infrastructure: There exists many regions in the country, which are yet to be brought under the regular banking system like bank branches and ATMs and it is difficult to process DBT for those areas.
• Digital literacy: The digital literacy of the people in rural areas is comparatively poor and they might be even unaware of the benefits that they are eligible to receive from the government.
• Ineffective grievance redressal: The process of grievance redressal is opaque in many schemes and the point of contact in case of discrepancy is also unclear. For example, many citizens have claimed that they were not getting the DBT for their LPG connections in spite of opting for it.

However, the continuous refinement of DBT, coupled with efforts to bridge the digital divide, can fortify India’s social welfare system, making it more robust, efficient, and citizen-centric.