India saved Rs 3.48 lakh crore as DBT cut leakages in last 10 years: Report

New Delhi, April 17: India's Direct Benefit Transfer (DBT) system has resulted in cumulative savings of Rs 3.48 lakh crore through a reduction in leakages that were taking place earlier, and a 16-fold expansion in beneficiary coverage from 11 crore to 176 crore since its launch by Prime Minister Narendra Modi-led government, according to a report released on Thursday.

Since the money goes directly into the bank accounts of beneficiaries the leakage as been curbed which has resulted in a halving of subsidy allocations from 16 per cent to 9 per cent of total expenditure.

"The DBT has redefined welfare delivery by enhancing transparency, curbing leakages, and ensuring precise fund distribution,” the study states.

This policy document evaluates a decade of data (2009–2024) to assess DBT’s impact on budgetary efficiency, subsidy rationalization, and social outcomes.

The newly developed Welfare Efficiency Index (WEI), which quantifies fiscal and social gains, surged from 0.32 in 2014 to 0.91 in 2023, underscoring systemic improvements, the policy document states.

According to the document, despite a rise in welfare budgets from Rs 2.1 lakh crore in 2009–10 to Rs 8.5 lakh crore in 2023–24, subsidy allocations declined proportionally, reflecting DBT-driven efficiency.

It points out that food subsidies accounted for 53 per cent of total savings (Rs 1.85 lakh crore), while programs like MGNREGS and PM-KISAN achieved 98 per cent timely wage transfers and Rs 22,106 crore in savings, respectively.

Aadhaar-linked authentication eliminated ghost beneficiaries, enabling coverage expansion without proportional fiscal expenditure.

The study employs a mixed-methods approach, synthesizing Union Budget data, DBT portal records, and secondary sources. Analytical tools include correlation analysis, Granger causality tests, and the WEI—a composite metric weighting DBT savings of 50 per cent, subsidy reduction of 30 per cent), and beneficiary growth of 20 per cent.

The policy recommendations emanating from the study include expansion of DBT coverage through the transition of remaining subsidy-based schemes to direct benefit transfer.

It also recommends the strengthening of digital infrastructure and the prioritisation of rural and semi-urban banking access to bridge inclusion gaps.

Besides, the study has come out in favour of leveraging advanced analytics with the integration of AI-driven fraud detection to further minimize leakages.

It also recommends the need to improve grievance redressal through the establishment of robust mechanisms to address exclusion.

"Contrary to critiques of reduced welfare spending, DBT has optimized resource utilization, enabling broader beneficiary reach with lower fiscal outlays. By replacing inefficient subsidies with targeted transfers, India has achieved measurable gains in welfare efficiency," the report states.

Future efforts must focus on scaling up DBT’s reach, harnessing technology, and sustaining inclusive growth to ensure equitable welfare governance, the report concludes.

Reader Comments

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Rahul K.

This is truly impressive! ₹3.48 lakh crore saved means more funds can be directed to other development projects. The Aadhaar linkage seems to be working well to eliminate ghost beneficiaries. Hope they keep improving the system 👏

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Priya M.

While the numbers look good, I know several elderly people in my village who still struggle with bank access. The system needs to ensure no genuine beneficiary is left out in the push for digital efficiency.

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Sanjay T.

The 98% timely wage transfers in MGNREGS is a game changer for rural workers! No more waiting for months to get paid. This is how technology should serve the people 💯

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Ananya R.

Interesting to see the Welfare Efficiency Index concept. Would love to see more details about how exactly they calculate this metric. Transparency in methodology is important for public trust.

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Vikram J.

The AI-driven fraud detection recommendation makes sense. With such large sums involved, we need cutting-edge solutions to stay ahead of those trying to game the system. More power to DBT!

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Neha P.

My mother gets her pension directly in her account now. No more middlemen taking cuts! 😊 But the article doesn't mention - what happens to people whose Aadhaar gets deactivated by mistake? The grievance system needs to be foolproof.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.