Direct Benefits Transfer and e-Governance: A Perspective

With the aim of bringing about transparency and reforming the government delivery system of benefits and subsidies, the Government of India launched the ambitious Direct Benefits Transfer System (DBT). Envisaged as a radical transformation in the service delivery of government welfare schemes/subsidies, DBT seeks to bypass the inefficiencies that have been faced by traditional service delivery mechanisms in the past, and transfer the allocated funds directly into the bank accounts of the intended beneficiaries.

To understand the need and benefits of DBT, we need to first understand the challenges that were faced by traditional delivery systems, which are broadly classified into three categories below:
 
    • Authentication of Identity: This included the problem of errors in inclusion and exclusion (The inclusion of undeserving candidates and exclusion of deserving ones), wherein the former, with various corrupt strategies, were availing undue entitlements and the latter were denied benefits, on the grounds of inability to prove their identity. Other pressing issues faced, were that of bogus identities (Ghost/Duplicate identities) and operational errors (spelling mistakes, change of address etc.)
 
    • Supply Chain: Manual processing of cash transfer schemes (pensions, fellowships etc.) resulted in significant delays, errors and high processing costs. Leakage of revenue was a major problem in cash and subsidized goods, due to the ease of appropriation and incentives for diversion to the market.
 
    • Monitoring: In the case of targeted schemes, it is necessary that the entitlements reach the intended beneficiary. This requires a verification mechanism, taking the example of Pension schemes that cease to exist upon the beneficiary’s death, hence it is important to periodically check, whether the beneficiary is alive or not. In the previous systems, either such verifications did not exist or, were done manually, so, they were replete with errors.

  The first step hence, in tackling the aforementioned challenges was the creation of a centralized, singular and secure source of information of state residents, known as the State Residents Data Hub or the SRDH. It is a de-duplicated, cleansed and standardized version of citizens data, including demographics, biometrics and other related information; which when linked with departmental applications, facilitates the availing of Government Welfare Schemes/Benefits, hence, by extension, DBT.  IL&FS Technologies worked proactively with the governments of Rajasthan and Tamil-Nadu for the creation of their SRDH, which facilitates the leveraging of resident data in service delivery applications by managing complete state-level resident data, in a digitized, secure and centralized manner.

The DBT scheme was thus rolled out, to bypass any existing leakages and also standardize the delivery procedure using the Aadhar enabled payment system, in conjunction with the SRDH.

The Benefits of DBT:
    • Enhancement of Scheme Effectiveness: The direct offering of scheme benefits to beneficiaries, thus ensuring that citizens gain the most out of various schemes.
 
    • Minimizing Leakage and Pilferage: Reduction of multiple tiers when it comes to funding flows and transferring funds directly into the beneficiary’s account, thereby eliminating pilferage.
 
  • Better Accountability and Transparency: Generation of real-time reports through dashboards, helps in gaining end-to-end visibility across processes.

Currently, there are about 395 DBT schemes running across 56 departments in the country, with DBT solutions offering a single point interface for officials, beneficiaries and stakeholders in applying, viewing and tracking the status of applications. Thus with, comprehensive tracking capabilities ensuring that the subsidies/welfare schemes reach the intended beneficiaries, by allowing effective targeting; the automated process can further help in the mitigation of obstacles such as pilferage, duplication and fund leakages, providing maximum citizen benefits.

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Author: Sandeep Gupta, Senior Vice President – Delivery & Operations

Sandeep Gupta heads the delivery and operations functions and is responsible for successful completion, delivery and operations of ITL’s project in India and abroad. He has executed large and complex IT projects across geographies and industry verticals, and has successfully delivered process improvement and operational excellence for Banking, Automobile, Telecom, FMCG, Energy and Government.
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