Syllabus:

GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context: 

According to the Quantitative assessment report by the BlueKraft Digital Foundation, India’s DBT system saved ₹3.48 lakh crore by reducing leakages and improving subsidy efficiency.

More on the news

• The report evaluates data from 2009 to 2024, and introduces a Welfare Efficiency Index (WEI).
• The index surged nearly threefold—from 0.32 in 2014 to 0.91 in 2023—indicating significant gains in both inclusion and financial efficiency.

Key Achievements of DBT

• Subsidy allocations have dropped significantly from 16% in 2009–2013 to 9% in 2023–24 even as beneficiary coverage rose dramatically from 11 crore to 176 crore individuals. 

Sectoral Analysis

A detailed breakdown of sector-specific impacts shows how DBT has particularly benefited high-leakage programmes.

• Food Subsidies (PDS): ₹1.85 lakh crore saved, accounting for 53% of total DBT savings. This was largely due to Aadhaar-linked ration card authentication.
• MGNREGS: 98% of wages were transferred timely, saving ₹42,534 crore through DBT-driven accountability.
• PM-KISAN: ₹22,106 crore saved by deleting 2.1 crore ineligible beneficiaries from the scheme.
• Fertiliser Subsidies: Sales of 158 lakh MT of fertiliser were reduced, saving ₹18,699.8 crore through targeted disbursement.

JAM Trinity: The Backbone of DBT

Key pillar of DBT is the JAM trinity:

• Jan Dhan bank accounts
• Aadhaar unique ID numbers
• Mobile phones

This framework has enabled targeted, transparent, and large-scale transfers.

Welfare Efficiency Index

To quantify DBT’s effectiveness, the report introduces the Welfare Efficiency Index, which combines:

• Fiscal outcomes (like savings and reduced subsidies)
• Social indicators (such as beneficiary reach)

The Welfare Efficiency Index gives 50% weight to DBT savings, 30% to subsidy reduction, and 20% to beneficiary growth.

The WEI surged, driven by:

• DBT Savings: ₹3.48 lakh crore cumulative leakage reduction. 
• Subsidy Reduction:  A decline from 16% to 9% of total expenditure. 
• Beneficiary Growth: A 16-fold expansion in coverage.

This multifactor approach demonstrates that India’s efficiency gains are not merely a result of budget cuts but reflect broader systemic improvements.

Mains Practice

Q: Critically evaluate the impact of the DBT system on subsidy rationalisation, governance transparency, and social inclusion. Also, discuss the significance of the JAM trinity in ensuring targeted delivery.

UPSC PYQ

Q. Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment. (2022)