Prime Minister Narendra Modi underscored the transformative role of technology in governance, emphasizing its potential to inject new momentum and direction into the administrative framework. In a pointed critique of past Congress administrations, he highlighted the issue of middlemen siphoning off public welfare funds, a problem even acknowledged by former Prime Minister Rajiv Gandhi, who admitted that a significant portion of funds intended for the underprivileged was diverted, leaving only a fraction for the actual recipients. Modi's administration, in contrast, has leveraged technology to ensure transparency in records and enhance administrative efficiency, drastically reducing such leakages.
Direct Benefit Transfer or DBT - A blessing during pandemic (NIC)
Expounding on the pillars of his governance strategy, PM Modi emphasized the importance of policy-oriented governance and the comprehensive implementation of schemes as key factors in combating corruption. He asserted that these measures not only facilitate corruption-free governance but also guarantee social security for citizens. By ensuring thorough implementation, his administration has made significant strides in mitigating corruption and fostering an environment where welfare schemes reach their intended beneficiaries without the interference of middlemen.
PM Modi’s Comments
PM Modi, in an exclusive interaction with IANS at his official residence, said: “Our government has transferred about Rs 38 lakh crore directly into accounts of beneficiaries via Direct Benefit Transfer (DBT), so far.”
“If we talk about times of Rajiv Gandhi government (when out of Rs 1, only 15 paise reached the intended beneficiaries), about Rs 25-30 lakh crore could have been gobbled up by the middlemen,” he added.
“When the policy is laid out in black and white, the grey area is brought down to minimal levels, this reduces the scope for any discrimination. We have focussed on policy-driven governance,” PM Modi said.
“We have focused on 100 percent delivery of schemes to targeted beneficiaries. If people are convinced that they are bound to get benefits sooner or later, this leaves no room for corruption. Some mischievous elements may still try to spoil the system but can’t befool the beneficiaries for long,” PM Modi said.
PM Modi on Congress
Prime Minister Narendra Modi, in a candid interview with news agency IANS on Monday, expressed deep concern over the endorsements received by Congress leader Rahul Gandhi and AAP chief Arvind Kejriwal from Pakistan. Labeling it as a "matter of grave concern," Modi called for a thorough investigation into the issue. He questioned why a select group of individuals, seemingly antagonistic towards India, consistently garner support from Pakistan.
"I don’t understand why some select group of people, apparently those who harbour animosity against us, get endorsements from Pakistan, why voices of support emanate from there, for certain individuals," Modi remarked.
Highlighting India's status as a mature democracy, the Prime Minister emphasized that such 'provocation' necessitates serious scrutiny to understand the underlying motives and implications.
Direct Benefit Transfer (DBT)
Since its inceptio n on January 1, 2013, the Direct Benefit Transfer (DBT) program has significantly transformed the mechanism of transferring cash subsidies and benefits in India. Aimed at minimizing leakages and delays by crediting subsidies directly into Aadhaar-seeded bank accounts, DBT has revolutionized the way government benefits reach the public. Initially facilitated by the Central Plan Scheme Monitoring System (CPSMS), now known as the Public Financial Management System (PFMS), the program's first milestone was achieved when a payment was made to a mother in Puducherry under the Janani Suraksha Yojana in January 2013.
The DBT program has been pivotal in reforming the government delivery system by re-engineering existing welfare processes for simpler and faster fund transfers. Utilizing the Aadhaar Payment Bridge of NPCI, CPSMS prepared beneficiary lists, digitally signed them, and processed payments directly to beneficiaries' bank accounts. This initiative ensured accurate targeting, de-duplication, and a significant reduction in fraud. Over the past seven years, DBT has become the preferred method for delivering development schemes, with more than 450 schemes benefiting over 900 million people.
The impact of DBT since 2014 has been monumental, with the government disbursing an astounding Rs 8.22 lakh crore—nearly 60% of the welfare and subsidies budget of the Union government—directly into the bank accounts of beneficiaries. This not only underscores the efficiency and transparency of the DBT system but also highlights its critical role in ensuring that subsidies and benefits reach the intended recipients promptly and without leakage. As DBT continues to evolve, it remains a cornerstone of India's efforts to streamline and enhance the delivery of government welfare programs.
Components of DBT
At the heart of the Direct Benefit Transfer (DBT) scheme lies a sophisticated infrastructure designed to ensure seamless delivery of subsidies and benefits to the intended recipients. Key components of this implementation include the Beneficiary Account Validation System, a robust payment and reconciliation platform meticulously integrated with various financial institutions. This infrastructure encompasses the Reserve Bank of India (RBI), National Payments Corporation of India (NPCI), and both public and private sector banks, including Regional Rural Banks and Cooperative Banks. Leveraging the core banking solutions of banks and the settlement systems of RBI, DBT utilizes cutting-edge technology such as the Aadhaar Payment Bridge of NPCI to validate beneficiary accounts and facilitate secure and efficient fund transfers.
Beneficiary Account Validation
These integrated systems serve as the backbone of efficient governance in the social sector, seamlessly managing a multitude of Central Sector, Centrally Sponsored, and State-linked schemes. With user-friendly functionalities, they enable beneficiaries to apply for schemes, providing essential details such as bank account and Aadhaar information. Scheme owners meticulously examine eligibility criteria against scheme guidelines, initiating verification processes for bank accounts and Aadhaar. Once verified, payments are swiftly processed through Fund Transfer Orders, ensuring timely disbursement of benefits. Noteworthy examples of such systems include MNREGA, PM-AWAS, PM-KISAN, and DBT-PAHAL, each designed to enhance accessibility and transparency in welfare programs. While Aadhaar linkage remains prevalent in many schemes, alternatives such as bank account numbers are also accommodated, ensuring inclusivity for all eligible beneficiaries.
Payment and Reconciliation
In the realm of welfare schemes, the selection of valid beneficiaries is paramount, ensuring that benefits reach those in need in a timely manner. To facilitate this process, Scheme IT systems play a crucial role by initiating payments and sending payment instructions to the Public Financial Management System (PFMS). PFMS, serving as a robust payment and reconciliation platform, has integrated with over 500 banks, streamlining verification processes for beneficiary bank accounts and Aadhaar seeding with the National Payments Corporation of India (NPCI). This proactive validation of beneficiary accounts and Aadhaar linkages has significantly reduced payment failures and delays, ensuring that funds are swiftly available to beneficiaries.
Core Banking Solutions
In the intricate web of Direct Benefit Transfer (DBT) processes, banks emerge as the crucial link, serving as the last mile delivery channels for disbursing funds to beneficiaries. With all account-based payments channeled through core banking channels, the efficiency of processing at this stage becomes paramount. It is this efficiency, coupled with the seamless flow of reverse Management Information System (MIS) data, that imparts the necessary momentum to the DBT program.
Aadhaar Payment Bridge (APB)
In a pioneering move to streamline the disbursement of government benefits and subsidies, the National Payments Corporation of India (NPCI) has introduced the Aadhaar Payment Bridge (APB) System. This innovative payment mechanism leverages the unique Aadhaar number as a central identifier to electronically channelize welfare funds into Aadhaar Enabled Bank Accounts (AEBA) of the intended beneficiaries. At the heart of the APB System lies the Aadhaar mapper, meticulously maintained by NPCI, which serves as the backbone for routing payments to designated banks. This mapper meticulously stores information about banks linked with Aadhaar numbers, enabling NPCI to seamlessly transfer funds to the destination bank accounts of Direct Benefit Transfer (DBT) beneficiaries.
DBT during COVID-19
Amidst the turmoil wrought by the COVID-19 pandemic and ensuing lockdown measures, Direct Benefit Transfer (DBT) emerged as a beacon of hope for millions of affected citizens across India. As the nation grappled with the unprecedented crisis, the Government swiftly implemented DBT to provide essential relief to those whose livelihoods were severely impacted. With a nationwide lockdown imposed for 21 days, the Public Financial Management System (PFMS) team rose to the challenge, ensuring the seamless functioning of the government's financial machinery. Notably, PFMS witnessed a historic milestone on March 30, 2020, recording a staggering 2.19 crore transactions in a single day, predominantly driven by DBT payments. Leveraging digital payments technology, PFMS disbursed cash amounts totaling Rs 27,442.08 crore to 11.42 crore beneficiaries under various Central and Centrally Sponsored Schemes, including PM-KISAN, MGNREGS, NSAP, PMMVY, NRLM, NHM, and scholarship schemes, among others.
Furthermore, several states including Uttar Pradesh, Bihar, Madhya Pradesh, Tripura, Maharashtra, Jammu & Kashmir, and Andhra Pradesh capitalized on the DBT platform of PFMS to extend relief to their citizens. Through 180 welfare schemes, state governments disbursed Rs 9,217.22 crore to 4.59 crore beneficiaries between March 24 and April 17. As the crisis deepened and the number of beneficiaries surged, India's DBT structure faced further scrutiny. By October 9, 2020, a total of 47 crore beneficiaries had received DBT relief amounting to ₹1,41,714 crores for the financial year 2020-21. Balazs Horvath, chief economist of UNDP, Asia-Pacific, underscored the significance of social safety nets in mitigating the economic fallout of the pandemic, emphasizing the pivotal role played by DBT in sustaining livelihoods, particularly among vulnerable segments of society.
The efficacy of DBT and cash transfers in offsetting the economic damage inflicted by the COVID-19 pandemic remains a subject of debate. However, there is consensus on the pivotal role played by DBT in providing immediate relief to millions, especially the underprivileged, navigating through the turbulent period. As the nation continues its battle against the pandemic, DBT stands as a testament to the government's commitment to ensuring the welfare and well-being of its citizens during times of crisis.
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