DBT savings: Rs 2.23L cr & counting

This is giving the managers of government finances significant relief, when the Covid-related additional spending commitments on welfare and as economic stimulus has increased the fiscal burden.

Transfer of assorted subsidies and sops to the beneficiaries through the direct benefit transfer (DBT) resulted in gains of Rs 44,572 crore in FY21, taking the Centre’s savings due to plugging of leakages to Rs 2.23 lakh crore between FY15 and FY21. With more schemes being covered under DBT and the scope of such transfers under already DBT-enabled schemes being on the rise, the savings are continuing to increase. This is giving the managers of government finances significant relief, when the Covid-related additional spending commitments on welfare and as economic stimulus has increased the fiscal burden.

To put this in a perspective, the DBT-enabled savings in FY15-FY21 period are slightly higher than the Centre’s expenditure on higher education during the seven years or four times the budgeted spending of the ministry of labour and employment during the period.

Thanks to the implementation of additional welfare measures to give succour to people affected by Covid-19, DBT transfers rose 45% to Rs 5.53 lakh crore in FY21. Between FY14 (when the DBT scheme was launched) and FY21, close to Rs 16.38 lakh crore had been transferred to the beneficiaries via cash paid to their bank accounts and as in-kind benefits.

DBT transfers have since gone up to Rs 19.75 lakh crore so far in FY22. The jump in DBT is largely attributed to the increased use of Aadhaar-enabled DBT platforms for most of the flagship welfare schemes.

Out of the cumulative DBT-enabled gains of Rs 2.12 crore till FY21, weeding out of fake ration cards under the public distribution system for food grains helped in saving Rs 1.02 lakh crore (45% of the total). Removal of fake beneficiaries under LPG-Pahal scheme helped in savings to the tune of Rs 72,910 crore (33%). Among others, the deletion of duplicate beneficiaries under the job guarantee scheme (MGNREGS) yielded gains of Rs 33,475 crore (15%) and Rs 10,000 crore (4%) due to a reduction in the sale of subsidised fertiliser.

The DBT-enabled annual savings were Rs 20,885 crore in FY17 and peaked in FY19 with Rs 51,665 crore.
According to an estimate by the Centre, the Aadhaar-enabled DBT platform helped eliminate 4.11 crore fake LPG connections and 3.99 crore duplicate ration cards. It also resulted in a reduction of 121 lakh metric tonnes of fertilizer sale to retailers and 10% savings on wages on account of deletion of non-existent MGNREGS beneficiaries.

Thanks to Covid-induced cash relief given to the poor (the government transferred about Rs 31,000 crore to Women Jan Dhan account holders), beneficiaries under a clutch of schemes including PM Kisan, more than doubled to 54.22 crore, with cash transfers rising 36% on year to Rs 1.5 lakh crore in FY21.

Separately, number of cash beneficiaries rose 17% on year in MGNREGS (job guarantee scheme) to 13.93 crore while beneficiaries rose by one-third in Pradhan Mantri Awas Yojana (rural) to 1.84 crore in FY21. Among in-kind schemes, Aadhar-enabled beneficiaries rose 92% on year to 4.59 crore in FY21 while PDS beneficiaries rose 12% on year to 70.37 crore.