A Report on Direct Benefit Transfers to Janalakshmi

In India, there are two prominent means of distributing welfare benefits, both of which are equally important.  The first of which is through the central government. The Government of India is responsible for designing, and in conjunction with the state government, implementing Direct Benefit Transfer (DBT) schemes.  The other means of delivering welfare benefits is via the state government. State programs do not necessarily utilize monetary transfers like centrally sponsored DBT schemes. Many state sponsored programs endeavor to provide services rather than conditional monetary transfers. For example, Karnataka state has established day care centers for the elderly and residential schools as well as immunization and employment programs for the disabled. Both types of welfare programs, via the state and central government, are essential for the empowerment and development of India.

This report will specifically examine the Government of India’s centrally implemented DBT schemes. The objective of this report is to contextualize DBT in India after its first year of implementation by examining the evolution of DBT, the advantages, challenges, and the current political environment. Based on these factors, at the conclusion of this report I advocate for expanding branchless banking to accelerate one of DBT’s ultimate objectives, widening the financial inclusion of India.