The Direct Benefit Transfer (DBT) is a scheme or program launched by the Government of India on 1st January 2013 to reform the mechanism of transferring subsidies and benefits. The program was initiated to solve the problem of widespread inefficiencies, corruption, and leakages, which had plagued the traditional subsidy distribution system, with the Public Distribution System (PDS) alone seeing a leakage rate as high as 46.7% in 2011. The core objective is to ensure accurate targeting of beneficiaries, de-duplication, and reduction of fraud by transferring funds directly to the recipient's bank account.
The mechanism relies on the JAM Trinity: Jan Dhan bank accounts, Aadhaar unique IDs, and Mobile phones, which together enable targeted and transparent transfers. The transfer of funds is routed through the Public Financial Management System (PFMS), which was formerly the Central Plan Scheme Monitoring System (CPSMS). PFMS acts as the common platform, processing payments to the beneficiary's bank account using the Aadhaar Payment Bridge (APB) of the National Payments Corporation of India (NPCI). The scheme covers both cash transfers, such as for MGNREGA and NSAP, and in-kind benefits.
The DBT Mission was initially created under the Planning Commission, but was later placed under the Cabinet Secretariat (Secretary, Co-ordination & PG) effective 14.9.2015, signaling its high-priority status. The system has expanded to cover over 300 Central schemes and more than 2000 State schemes by April 2023. This efficient delivery of welfare is seen as reinforcing the constitutional guarantee of a dignified life under Article 21 by transforming welfare from a bureaucratic process into a direct entitlement. The evolution towards DBT 2.0 focuses on an online eligibility verification mechanism using Aadhaar.