India Gains Rs 3.48 Lakh Crore from DBT Reducing Leakages Over the Last Decade: Report

New Delhi, April 17 (NationPress) The implementation of India's Direct Benefit Transfer (DBT) system has led to a remarkable total savings of Rs 3.48 lakh crore due to a significant reduction in previous leakages, coupled with an impressive 16-fold increase in beneficiary coverage from 11 crore to 176 crore since its initiation under the government led by Prime Minister Narendra Modi, as detailed in a report published on Thursday.

The direct transfer of funds into beneficiaries' bank accounts has effectively curtailed leakages, resulting in a decrease in subsidy allocations from 16 percent to 9 percent of the total expenditure.

According to the study, "The DBT has transformed welfare delivery by improving transparency, reducing leakages, and ensuring accurate fund distribution." This policy evaluation analyzes a decade's worth of data (2009–2024) to measure the impact of DBT on budgetary efficiency, subsidy rationalization, and social outcomes.

The newly introduced Welfare Efficiency Index (WEI), which assesses both fiscal and social advantages, has increased from 0.32 in 2014 to 0.91 in 2023, highlighting significant systemic enhancements, as noted in the document.

The report indicates that despite an increase in welfare budgets from Rs 2.1 lakh crore in 2009–10 to Rs 8.5 lakh crore in 2023–24, the proportion of subsidy allocations has decreased, demonstrating the efficiency driven by DBT.

Food subsidies alone accounted for 53 percent of total savings (Rs 1.85 lakh crore), while initiatives such as MGNREGS and PM-KISAN achieved 98 percent timely wage transfers and generated savings of Rs 22,106 crore, respectively.

The integration of Aadhaar-linked authentication has effectively removed ghost beneficiaries, facilitating coverage expansion without a corresponding increase in fiscal expenditure.

The study employs a mixed-methods approach, integrating Union Budget data, records from the DBT portal, and secondary sources. Analytical methods include correlation analysis, Granger causality tests, and the WEI—a composite metric that weighs DBT savings at 50 percent, subsidy reduction at 30 percent, and beneficiary growth at 20 percent.

Policy suggestions from the study advocate for the extension of DBT coverage by transitioning remaining subsidy-based schemes to direct benefit transfers.

It also emphasizes the need for enhanced digital infrastructure and prioritization of banking access in rural and semi-urban areas to close inclusion gaps.

Moreover, the study supports utilizing advanced analytics, including the integration of AI-driven fraud detection, to further reduce leakages.

Improving grievance redressal is also recommended through the establishment of robust mechanisms to tackle exclusion.

"In contrast to critiques regarding reduced welfare spending, DBT has optimized resource allocation, allowing for a wider beneficiary reach with lower fiscal outlays. By substituting inefficient subsidies with targeted transfers, India has realized measurable improvements in welfare efficiency," the report concludes.

Future initiatives should concentrate on expanding DBT’s reach, leveraging technology, and promoting inclusive growth to ensure equitable welfare governance, the report suggests.