Rollout of Direct Benefits Transfer in India

Rollout of Direct Benefits Transfer to begin from 1 January 2013

A decision was taken in the meeting of the National Committee on Direct Cash Transfers held by the Prime Minister that Direct Benefit Transfers will be rolled out from 1 January 2013 in 43 identified districts. The purpose of Direct Benefits Transfer is to ensure that benefits go to individuals bank accounts electronically, cutting down delays and diversions.Finance Minister P Chidambaram described the move as a "game changer" for future. Admitting there could be some unforeseen glitches in the implementation of the scheme, Chidambaram said these would be overcome and the government was confident to roll it out across the country by the end of 2013.

What is Direct Benefits Transfer and what does it cover:

1. Government will transfer cash benefits like scholarships, pensions, NREGA wages, etc. directly to the Bank or Post Office Accounts of identified beneficiaries under the Direct Benefits Transfer (DBT) programme. The shift to this would done in a phased, time-bound manner after ensuring that the necessary systems are in place for Direct Benefits Transfer.

2. Direct Benefits Transfer will not be a substitute for delivery of public services which would continue to take place as per the normal delivery channels. 

3. Direct Benefits Transfer will not replace food with cash under the Public Distribution System. The Government is committed to legislating the National Food Security Act.

What does Rollout on 1.1.2013 mean in practice:

4. For the rollout beginning on 1.1.2013, 43 districts in 16 States have been identified for the first round of Direct Benefits Transfer under 26 selected schemes. The selection of 43 districts has been done on the basis of coverage of bank accounts and Aadhaar. 

5. The rollout has been phased based on: 
(a) The next instalment being due either on 1.1.2013 or at a later date. 
(b) The list of beneficiaries being digitized in the district concerned. 
(c) The opening of bank accounts for beneficiaries in the district concerned. 
(d) Enrolment for Aadhaar numbers in the district concerned. 
(e) Seeding of bank accounts with Aadhaar numbers in the district concerned. 
(f) Availability of funds. 

6. Based on the level of preparedness and the ongoing nature of the rollout, Direct Benefits Transfer will begin to take place from 1st January, 2013 as follows: 

There will be a Direct Benefit Transfer on 1.1.2013 through a cash transfer into beneficiaries` bank accounts in 7 schemes. 

These schemes are spread over districts as below: 
a.Post-matric scholarship for SC students - 7 districts; 48,000 beneficiaries (Puducherry, Nawanshahr, Fatehgarh Sahib, Gurdaspur, Anantpur, East Godavari, Diu) 
b. Pre-matric scholarship for SC students - 1 district; 24,000 beneficiaries (East Godavari) 
c. Post-matric scholarship for OBC students - 6 districts; 105,000 beneficiaries (Puducherry, Alwar, Anantpur, East Godavari, Daman, North Goa) 
d. Post-matric scholarship for ST students - 3 districts; 4,800 beneficiaries (Tumkur, Waynad, Harda) 
e. Indira Gandhi Matrutva Sahayata Yojana - 6 districts; 55,000 beneficiaries (Dharwar, Puducherry, NW Delhi, Diu, North Goa, Amaravati) 
f. Dhanalakshmi Scheme - 1 district; 8,000 beneficiaries (Fatehgarh Sahib) 
g. Stipend to trainees under the scheme of welfare of SC/ST job seekers through Coaching-cum-Guidance and Vocational Training - 10 States, 650 beneficiaries (Karnataka, Kerala, Haryana, Punjab, Delhi, MP, Rajasthan, AP, Maharashtra, Jharkhand) 

On 1.1.2013, over 2 lakh beneficiaries will start receiving benefits through Direct Benefits Transfer. In 20 of the 43 districts, all future benefits transfers under all the 26 schemes, whenever they are due after 1.1.2013 as per their cycle, will be through Direct Benefits Transfer. There will be some phased rollout in a few schemes in some of these districts. In a sense, these 20 districts go "live" for Direct Benefits Transfer from 1.1.2013.