Direct Benefits Transfer subsidy scheme to extended to 78 more districts in July 2013

Govt. announced that the Direct Benefits Transfer (DBT) subsidy scheme to be being extended to 78 more districts in July 2013.

  • Rolled out in 43 districts in Phase I in January, 2013.
  • LPG subsidy will be included in this as the scheme is expanded in a phased manner to cover 20 districts by May 15, 2013.
  • Along with the expansion of Aadhaar enrolment,  more districts will be brought in the ambit of this scheme.
  • The scheme will be expanded to include post offices from October, 1 2013.
  • Three pension schemes of rural development ministry would also be included in the programme.
  • In the meeting of the National Committee on DBT, it was decided that the scheme, in phase II beginning July 1, 2013 will be expanded to include 1/5 th of India as 78 more districts will be included in under the cover of this scheme in states like Bihar, Chattisgarh, Odisha, Uttar Pradesh, Uttarakhand and West Bengal.

Benefits of bringing LPG subsidy under the ambit of this scheme:

  • Total number of LPG consumers in India: around 14 Crores
  • With the roll out in this scheme, the subsidy amount will be transferred to consumers directly into their bank a/c.
  • Thus, with the subsidy going directly in beneficiary a/c, there will be only one price at which cylinders will be sold at a dealer’s shop.
  • Thus, it will eliminate all ghost connections.
  • It will eliminate diversion of cylinders.

How is DBT a challenge over other methods of providing a simple subsidy?
DBT, in a conceptual manner involves involves a few simple steps viz. Digitization of data,

  • Enrollment in  Aadhaar
  • Opening bank accounts
  • Seeding the bank accounts.

Above this, DBT also needs process re-engineering as there needs to be brought a sea change in the manner in which

  • – business is transacted
  • – funds are released
  • – funds are tracked
  • – the information is maintained on beneficiaries



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