How Direct Benefit Transfer Became India’s Booster During Pandemic, and Why World Bank is in Awe

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posted on 2 years ago — updated on 1 second ago

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World Bank president David Malpass has asked other nations to adopt India’s move of targeted cash transfers than broad subsidies... India transferred Rs 5.52 trillion through DBT in 2020-21, 45% up from previous fiscal

World Bank President David Malpass’s praise for India’s Direct Benefit Transfer (DBT) programme in helping people during the Covid-19 pandemic comes amidst India drastically increasing its DBT coverage in the last two-and-a-half years to hit a record high.

“Helped by digital cash transfers, India managed to provide food or cash support to a remarkable 85% of rural households and 69% of urban households,” Malpass has said, asking other nations to adopt India’s move of targeted cash transfer instead of broad subsidies. A look at India’s DBT record explains this.

India transferred Rs 5.52 trillion through DBT in 2020-21 when the pandemic hit the country, up nearly 45% from the previous financial year figure of Rs 3.81 trillion. In 2021-22, the DBT transfers rose to Rs 6.3 trillion, and in the present financial year so far (in six months), the total DBT transfer has been to the tune of Rs 2.82 trillion, as per the latest figures.

News18 had earlier reported on September 18 that India’s cumulative DBT figure since 2015 crossed Rs 25 trillion last month and over 56% of that money was given to people in the last two-and-a-half years. Prime Minister Narendra Modi had earlier said DBT proved to be a saviour for people during Covid.

In the last financial year, nearly 73 crore people received DBT benefits in cash and 105 crore people in kind — many of these beneficiaries received more than one benefit, figures show. 319 schemes of 53 central ministries are linked to the DBT scheme. A record number of 783 crore transactions took place in 2021-22 under the DBT, which was also a big jump from 603 crore transactions in 2020-21 and 438 crore transactions in the 2019-20 financial year. This amounted to a near 79% jump in the number of transactions over the last two years.

The Narendra Modi government embarked on the Pradhan Mantri Garib Kalyan Anna Yojana in 2020 to provide free rations to nearly 80 crore people in the country during the Covid pandemic — this seems to have played a big role in the increase in DBT. The scheme was recently extended till the end of the year. The maximum 342 crore transactions in 2021-22 was under the Public Distribution Scheme (PDS) with benefits worth Rs 2.17 lakh crore being transferred to people.

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