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DBT Scheme - Is It A Breakthrough or A Breakdown?

 

DBT Scheme- Is It A Breakthrough or A Breakdown?

The Direct Benefit Transfer (DBT) scheme was launched by the Government of India on 1st January 2013. It aims to transfer subsidies and other benefits, directly to people living Below Poverty Line (BPL), through the Aadhaar Payment Bridge, which will be linked with bank accounts for on-line payment of funds.

Benefit transfers cover schemes like scholarships, Janany Suraksha Yojana, Indira Awaas Yojana etc, whereas cash transfers are given to the beneficiary to incentivize consumption of specific goods like education, Pakka Housing etc.

DBT envisages a switch from the present electronic transfer of benefits to bank accounts directly, to Aadhaar seeded bank accounts of beneficiaries. The money can then be used to buy services from the market.

This scheme,  has linked with itself,  the world’s biggest job guarantee scheme,  MGNREGA – ‘The Mahatma Gandhi National Rural Employment Guarantee Act’(aiming at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work). It is planned to be successfully implemented in 50 districts of the country by October 2013. If it fairs well for the government it will launch the same across 150 districts by March 2014 just before the 2014 elections.

In the present system it is of certitude that a lot of middlemen eat the chunk of what is meant for BPL families (for example, as much as 39% of subsidized kerosene is stolen), and the actual people in need get minimum or no share, and are left lamenting. DBT will bring in a much welcome transparency and terminate pilferage from fund distribution by the intermediaries. But it takes huge delays (at least a couple of months) in the transfer of wages, on account of manual updating of job records and bureaucratic clearance for making payments. While the other side of the coin is that the money may not be used for the intended purpose and beneficiaries may squander it.

But again implementing the DBT is not going to be a cakewalk for the government. As under this scheme only Aadhaar card holders will get cash transfers… the statistics pointing out that there are about 40% families in rural areas not having a bank account and hardly 20% families having an Aadhaar number, are quite disturbing. Also the rural areas of our nation are not that developed to have one bank in every village. Hence the account holders travel long distances to visit their nearest bank branch. These factors will certainly limit the reach of cash transfer.

Moreover, the government has given three months time to those who do not have a bank account or Aadhaar number and if they fail get the same within the stipulated time then they will not be able to avail the benefit of LPG (DBTL) scheme, which is the next big leap under the Direct Cash Transfer (DCT) scheme. It plans to cover a huge number of nearly 14 Crore LPG users.

 The scheme, which is likely to be launched from July 1, is aimed at directly putting the subsidy component of the domestic cylinder into the bank account of the consumers, eliminating the leakages in the system and the problem of diversion of domestic cylinders for commercial market. The consumers are likely to get around Rs.4,000 per annum from the government, and they will have to then buy LPG at the market price of Rs. 901.50 per 14.2-kg cylinder. Currently, each consumer is entitled to 9 cylinders of 14.2-kg each at the subsidized price of Rs.410.50. The government bears a subsidy Rs.435 per cylinder.

The government disburses Rs 31000/- crore to the BPL families every year under MGNREGA scheme. Though Direct Cash Transfers do provide political mileage to rulers (says a World Bank study ), whether the AADHAR and BDT schemes have been brought in to fill the vote bank of the government is a question that is best left ‘To Each His Own’ to answer.

One thing a lot of people seem to be arriving on a consensus at is that what such schemes are doing is thwarting the development of the nation by making people lethargic from the distribution of free funds. But again, as a Government, it has its responsibilities to alleviate all sections of society… by any means so appropriate.

Another topic of debate is the idea that these schemes maintain the gap between urban and rural India by ensuring the rural people only two meals a day and instead the government should encourage entrepreneurship within the rural community which would make them self sufficient rather than relying on the government for food. But as Jean De La Fontaine has said, “A hungry stomach cannot hear.”… Making people entrepreneurs, while they are unable to put together a single meal a day themselves, seems unworthy.

Electronic Benefit Transfer (EBT) has already begun on a pilot basis in Andhra Pradesh, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu, West Bengal, Karnataka, Pondicherry and Sikkim. The government claims the results are encouraging.

What is to be seen now is whether these schemes bring in a breakthrough amongst all government schemes brought in so far, or it proves to be a mere banking- of- votes policy, which  literally used the banks deplorably, which for sure will lead to a breakdown.

Edited by , Swastika Sinha, Editor @ Nationsroot  

 

 

Devesh Devavrat

 
He loves writing on Politics, Current issues and Cricket. He has written a few short articles for National Dailies like The India Express and The Telegraph. A keen follower of Cricket, he is a big fan of Sachin Tendulkar, Mahendra Singh Dhoni and Ric...


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