October 2016

India’s Finance Minister, Mr. ArunJaitley, recently reiterated the government’s commitment to more efficient targeting of benefits through its Direct Benefit Transfer (DBT) programme, noting that it would be the “rule in future” (“ Digital Payments: Inclusion, Growth and Opportunities” conference organised by the Better than Cash Alliance and Observer Research Foundation on 1st October). Currently, there are 75 schemes (including DBT-Pahal for LPG) under the DBT programme, with 31.94 crore beneficiaries registered; during the month of August, Rs. 3459.20 crores was disbursed (Monthly Report sent to PMO for the month of August, 2016 on DBT). The government aims to expand DBT to a total of 147 schemes by March 2017.

In a two part policy brief set, “Designing Beneficiary-Centric ‘Direct Benefit Transfer Programmes- Lessons from India’, MicroSave lays out the current DBT environment in India (Part I) and highlights seven steps for operationalising an effective DBT programme (Part II). The note examines the issues to be addressed under each of the steps: Deciding the mode of benefit transfer suitable for the subsidy – cash or kind; Beneficiary identification; Beneficiary enrolment;Delivery channel; Programme communication; Pilot roll out, testing and scale-up; Grievance redressal mechanism. Each step calls for detailed preparatory work, that will work towards ensuring smooth implementation and reducing teething troubles.

Indicus Centre for Financial Inclusion, 2nd Floor, Nehru House, 4, Bahadur Shah ZafarMarg, New Delhi 110002