The ambitious Direct Benefit Transfer (DBT) system of the Government of India has been envisaged as a radical transformation in service delivery that bypasses the inefficiencies that traditional service delivery mechanisms have faced. Under the system, funds are transferred by banks directly to bank accounts of beneficiaries. These accounts are Aadhaar-enabled, in that they are linked to the beneficiary’s Aadhaar number. Beneficiaries can link their existing bank accounts or open new accounts, even no-frill ones, using their Aadhaar number. The entire process of fund disbursal to beneficiary accounts is instantaneous.

Transactions can be carried out by beneficiaries at the standard offtake points of bank branches and ATMs. However, to further ease access, the Business Correspondent (BC) model has been deployed. BCs carry out financial transactions using micro-ATMs (biometric point-of-sale devices) that authenticate identities by connecting to the UID system and thus ensure that funds are not misappropriated.

A pioneering scheme which has used the DBT mechanism for delivering entitlements is the Dilli Annashree Yojana which was launched by the Delhi government as the first direct cash transfer scheme for food security. Initiated in December 2012, the scheme is implemented by the Department of Food and Supplies, Government of Delhi in collaboration with eighteen major banks and the Unique Identification Authority of India. The scheme transfers INR 600 per month to the account of the senior-most female member of the eligible household. The eligible households are Delhi’s 2 lakh BPL population who cannot avail of ration cards owing to the Public Distribution System limit.

The deployment of DBT system to DAY has led to simplification of processes and operational efficiency as well as transparency and accountability in implementation of the scheme, inclusion and convenience for the beneficiaries, and timely payment of cash benefit into the beneficiaries’ accounts.

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