Direct Benefit Transfer scheme

The main advantages of DBT are mentioned below:

1. DBT helps prevent fraud by sending money directly to the beneficiary’s bank account.

1. It removes middlemen, ensuring that only the right person receives the benefit.

1. Aadhaar acts as a unique ID to verify the identity of the beneficiary.

1. This makes the transfer process more secure, accurate, and transparent.

Operating process for Direct Benefit Transfer

DBT process contains a number of sub-processes that are present at different levels. Given below are the sub-processes of DBT:

1. Preparatory steps that must be taken.
2. Public Financial Management System (PFMS) registration.
3. A beneficiary database must be created.
4. Checking the accuracy and validity of beneficiary details.
5. Payments that must be made and setting up of a feedback loop.

Different Types of Schemes Covered under Direct Bank Transfer

Cash transfer: Under this scheme, cash is directly transferred from the government to the individual beneficiaries.

The different routes that the transfer from the government to individual beneficiaries occurs in are mentioned below:

1. The beneficiary receiving the amount directly.
2. From the State Treasury Account to the beneficiary.
3. From an Implementing Agency that has been appointed by the government.
4. The beneficiary receives the money from the State or Central Government.

Some of the examples are the National Social Assistance Programme (NSAP) and MGNREGA.

In-kind benefits from the government to beneficiaries: Components of the schemes or the schemes itself are a part of this category. The government provides beneficiaries with in-kind benefits via an intermediate agency. The government usually bears the cost to buy the goods that can be used for public distribution as well as for providing them to the beneficiaries that they have targeted. The beneficiaries then get these services or goods for a very low price or for free.

Other forms of transfers: Incentives, allowances, etc., that are provided to Non-Government Organisations (NGOs) and community workers come under this category. They are provided such allowances because of the service they provide to other beneficiaries and to the community.

Function of Aadhaar under Direct Benefit Transfer Scheme

One of the major achievements of the government is the linking of the Aadhaar number to the DBT scheme. The main aim of linking the Aadhaar number is for the government to make all kinds of payments using this link. It also helps in making sure the right beneficiary receives the payment, and the payment is received directly to the beneficiary's account. The government also recently announced that LPG subsidy will not be provided for individuals whose yearly income is more than Rs.10 lakh.

Transaction charges for Direct Benefit Transfer and the applicable cash out incentives

On 26 February 2016, the Ministry of Finance released an order that all transactions made by Pratyaksh Hanstantrit Labh (PAHAL) or DBT must be done via the National Payments Corporation of India (NPCI). Banks are paid compensation to help make the process of DBT easy.

Given below are the two types of commission that are provided:

• Transaction cost: As per the NPCI circular, for each transaction, there is a charge of Rs.0.50 that is levied. The NPCI, destination beneficiaries, and sponsor banks must share the charge.
• Cash out incentives: In case of Pension Schemes, Maternity Benefits, and MGNREGA, they have a fixed charge of Rs.5 for every transaction and a variable charge of Rs.0.50 per transaction of Rs.100. This charge is subject to a maximum payable amount of Rs.5. The transaction amount that is made is rounded off to the next hundred. The main aim of offering these incentives is to provide efficient direct delivery of financial services to the final beneficiary.

Direct Benefit Transfer Portal

A portal has been launched by the government (https://dbtbharat.gov.in/) where all details of the scheme have been mentioned. All state and central welfare schemes can be accessed by administrators on the portal. Any updates or changes on the scheme will be updated on the portal. All the subsidies that are available to beneficiaries can also be accessed by them on the portal.