Direct Benefit Transfer Scheme
Context:
The recent Maharashtra and Jharkhand Assembly elections have witnessed a growing trend of using direct cash transfer schemes targeting women as a central element of political campaigns. The article discusses the efficacy of such schemes and their future implications.
Relevance:
GS-02 (Government policies and interventions)
Dimensions of the Article
- Highlights
- About the Topic and the Issue
- What are DBT schemes?
- The Arguments For and Against
Highlights:
- Maharashtra introduced the ‘Mukhyamantri Majhi Ladki Bahin Yojana,’ which guarantees ₹1,500 monthly to eligible women, and Jharkhand launched the ‘Jharkhand Mukhyamantri Maiya Samman Yojana,’ which offers ₹1,000.
- These schemes represent a political strategy in the name of welfare programs for women and are being used rampantly across different states.
About the Topic and the Issue:
- Considering the rise in women’s participation in elections, the voter turnout has increased from 47% in 1962 to 66% in 2924.
- Women in the present are voting willingly and independently, creating their own distinct “women constituency” that political parties cannot ignore.
- Example: Initiatives like the women’s reservation bill and campaigns focused on “Nari Shakti” highlight the efforts of the political parties to appease women voters.
- In order to ensure that the welfare schemes reach the desired target more efficiently, governments have come up with Direct Benefit Transfers (DBT) schemes that bypass middlemen to ensure funds reach beneficiaries directly.
- This also safeguards direct connection between leaders and voters, reinforcing individual loyalty.
- For the government and the political parties involved, unlike long-term plannings such as infrastructure projects and others, cash transfers serve as an immediate proof of the government’s commitment, especially among poorer populations who value such tangible benefits.
- This trend of DBT schemes is becoming very common across states, and it points to a lack of innovation.
- Even opposition-ruled states are adopting DBT schemes, which reflects a limited approach to addressing systemic poverty and welfare issues.
What are DBT schemes?
- It is the quickest and simplest form of targeting the beneficiaries by bypassing the intermediaries to ensure that funds and information reach beneficiaries directly.
- Pradhan Mantri Fasal Bima Yojana (PMFBY): A central sector scheme
- Pradhan Mantri Kisan Samman Nidhi (PMKISAN): A central sector scheme
- Rashtriya Krishi Vikas Yojana (RKVY): A centrally sponsored scheme
- Submission on Seeds and Planting Material (SEEDS): A centrally sponsored scheme
- Janani Suraksha Yojana: A scheme with an online application portal
- National Scheme of Incentive to Girls for Secondary Education: A scheme with an online application portal
- P.G. Indira Gandhi Scholarship For Single Girl Child: A scheme with an online application portal
- Swami Vivekananda Single Girl Child Fellowship for Research in Social Sciences: A scheme with an online application portal
- National Fellowship: A central sector scheme that provides scholarships to Scheduled Caste students
- It was started in 2013.
- Primary components in the implementation of DBT schemes include Beneficiary Account Validation System, a robust payment and reconciliation platform integrated with RBI, National Payments Corporation of India (NPCI), public and Cooperative sector banks, regional rural banks, cooperative banks, etc.
The Arguments For and Against:
- Arguments For:
- Empowerment: These schemes cater to the needs of the targeted beneficiary, acknowledging their role. For example, Pradhan Mantri Kisan Samman Nidhi (PMKISAN), a central sector scheme that provides a minimum income support to farmers by directly transferring cash to their bank accounts.
- Efficiency and Reduced Corruption: DBT minimises leakages and ensures transparency, leveraging technology to directly benefit recipients.
- Immediate Relief: Cash transfers provide quick assistance to vulnerable populations, acting as a safety net in times of need.
- Disposable Income: DBT schemes in a way increase the disposable income of people helping them with their daily needs. In a way, this also enables them to promptly pay their liabilities and even taxes of the government, which ultimately benefits the government’s exchequer.
- Arguments Against:
- Superficial Solutions: Critics argue that cash transfers address symptoms rather than the root causes of poverty. They are seen as “band-aid” solutions, not sustainable fixes.
- Erosion of State Responsibility: By nudging citizens toward private alternatives, the state risks disengaging from its duty to provide quality public services.
- Widening Inequality: While the affluent have already shifted to private systems, pushing the poor in the same direction can deepen existing divides.
- Limited Long-Term Impact: Without structural reforms, cash transfers alone cannot drive social mobility or economic growth.
Way Forward
- The government must demarcate between the long-term investments and short-term band-aid solutions. The prime focus should be investing in public services like education, healthcare, and infrastructure.
- DBT schemes should most likely target the very needy and the lower sections of society rather than becoming generic like some of the programs that target only women and not men. Ex: Shakthi scheme of Karnataka, which provides free bus travel only for women on non-premium government buses.
- States should rather find more creative and alternative solutions to DBT by
- Launching skill development and vocational training programs to enhance employability.
- Expanding social insurance programs like health, life, and crop insurance for vulnerable populations.
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