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Direct Benefit Transfer

Understanding the idea behind Direct Benefit Transfer

In January 2013, The Government of India, introduced the Direct Benefit Transfer or DBT scheme introduced to streamline the transfer of government-provided subsidies in India. The Government introduced the scheme with the objective of improving the delivery system and redesigning the existing procedures in welfare schemes. DBT aims to transfer subsidy benefits from various Indian welfare schemes directly into the beneficiaries' bank accounts. To avail of the DBT benefits, beneficiaries must ensure they link their bank account to their Aadhaar number.

Since the inception of the DBT scheme, the Government has launched 450 projects and reached over 900 million people.

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Advantages of Direct Benefit Transfer

  • DBT transfers help expedite the flow of funds and information securely while reducing the possibility of fraud.
  • It eliminates the need for intermediaries, including government officers, in transferring the subsidy amount directly into the beneficiary accounts.
  • It brings about transparency and reduces instances of pilferage from the distribution of Central Government-sponsored funds.
  • DBT ensures accurate targeting of beneficiaries.
  • Beneficiaries can link only one bank by seeding the fund deposits to their Aadhaar details to avoid duplication of subsidies.
  • It enables the Government to simultaneously reach out to both citizens and beneficiaries of the scheme.

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DBT Process

The following are the steps or sub-sections, which are the major checkpoints in the Direct Benefit Transfer process:

  1. Public Financial Management System (PFMS) registration.
  2. Examination of eligibility of the beneficiary.
  3. Verification of the beneficiaries' bank account/ Aadhar Enabled bank account.
  4. Initiation of the payment

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Types Of Schemes Covered In Direct Benefit Transfer

Cash Transfer 

Under the cash transfer scheme of Direct Benefit Transfer, the Government directly transfers the money to the individual beneficiaries.

The following ways can be used for cash transfer:

  • The cash can be directly transferred to the beneficiary's account.
  • The State Treasury Account can be used to transfer cash.
  • The implementing agency appointed by the Government can make cash transfers.
  • The state or central Government can make the cash transfer.

In-Kind benefit transfer

In-kind benefit transfer is a scheme of Direct Benefit Transfer where the Government offers benefits to the beneficiaries in kind either directly or through their implementing agencies.

Here, the Government incurs the expense of procuring a subsidy or benefit. For instance, the Government will buy a particular product, say food grains and offer it for public distribution.

Other transfers

Other than cash and kind transfers, the Direct Benefits Transfer scheme also transfers funds and subsidies to several non -governmental functionaries that help implement government policies until the very end. This includes community workers, NGOs, teachers in aided schools, etc. They are not beneficiaries but are given training, wages, and incentives to serve the beneficiaries.

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Frequently Asked Questions

The NPCI (National Payment Corporation of India) uses your Aadhar number as the key to making cash transfers under the Direct Benefit Transfer scheme. They create an Aadhaar mapper that maintains all the information about the beneficiaries account/ Aadhaar enabled bank account, which helps them process payments efficiently. And hence, it is advisable to link your Aadhaar card for the DBT process.


PFMS (Public Financial Management System) is a Central Plan Monitoring System of the Ministry of Finance, Government of India. It is used as a common platform to carry out both Aadhar and Non- Aaadhar e-payments for the DBT scheme.


Yes, you can. The Government has introduced the online Direct Benefit Transfer portal that holds all the information regarding the scheme. Any changes or updates about the Direct Benefit Transfer scheme will are directly available on the portal.

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