Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment. (Answer in 150 words)

Direct Benefit Transfer sends welfare payments directly to beneficiaries’ bank accounts, attempting to reduce leakages, intermediaries and transaction costs while improving state capacity.

Progressive features

• Digitised beneficiary records and Aadhaar-linked authentication can reduce duplication and ghost beneficiaries.
• Electronic payments improve traceability, portability and timeliness and can empower recipients with choice.
• DBT supports women’s financial visibility and enables outcome monitoring through transaction data.

Risks and gaps

• Exclusion may occur through authentication failure, data errors, inactive accounts or lack of connectivity.
• Many beneficiaries face distance to banking correspondents, cash-out charges and limited digital literacy.
• Cash transfers cannot substitute for public services such as nutrition, health and schooling where in-kind support is necessary.
• Privacy, profiling and weak grievance redressal create accountability concerns.

Conclusion

DBT should be combined with assisted access, offline alternatives, strong privacy safeguards, social audits and a responsive grievance system.

DBT; leakage reduction; authentication; exclusion error; financial inclusion; portability; grievance redressal.