India’s DBT System Saves Rs 3.48 Lakh Crore, Expands Welfare to 176 Cr Beneficiaries

A decade after the rollout of India’s Direct Benefit Transfer (DBT) system, a new report by Bluecraft has spotlighted the sweeping changes the initiative has brought to the country’s welfare architecture. Introduced in 2013 and rapidly expanded after 2014, the DBT model has emerged as a global benchmark for transparency, efficiency, and inclusivity in public welfare delivery.

Over the past 15 years (2009–2024), DBT has helped India save a staggering ₹3.48 lakh crore by eliminating leakages and curbing the misuse of funds. By leveraging Aadhaar-based authentication and digital platforms, the system has effectively weeded out ghost beneficiaries and ensured subsidies reach the intended recipients.

According to the report, while India’s welfare budget surged from ₹2.1 lakh crore in 2009-10 to ₹8.5 lakh crore in 2023-24, the proportion of funds allocated to subsidies dropped sharply—from 16% to just 9%. This reduction has allowed the government to maintain fiscal discipline while expanding welfare coverage dramatically—from 11 crore beneficiaries in 2009 to 176 crore in 2024.

Food subsidies alone accounted for more than half (₹1.85 lakh crore) of the total savings. Flagship schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and PM-KISAN have also shown significant efficiency gains. MGNREGS achieved 98% timely wage payments, while PM-KISAN saved ₹22,106 crore in leakages.

In response to concerns that DBT may have reduced welfare spending, the report points instead to a more optimised system—one that delivers more with less. By adopting targeted cash transfers, the government has expanded the scope of its welfare programmes without a proportional increase in expenditure.

The newly introduced Welfare Efficiency Index (WEI), which measures the effectiveness of welfare delivery, jumped from 0.32 in 2014 to 0.91 in 2023—underscoring the systemic improvements brought by DBT.

As India aims for its "Viksit Bharat 2047" goal, the success of DBT offers a compelling roadmap for future-ready governance. With the savings redirected into critical sectors such as healthcare (Ayushman Bharat), agriculture (PM-KISAN), and rural employment (MGNREGS), DBT is not just about fiscal reform—it’s about building an inclusive and sustainable welfare state.

Still, challenges remain. The report highlights the need to bridge rural digital divides, address exclusion errors, and counter emerging fraud tactics. Experts suggest future advancements should focus on AI-based fraud detection, strengthening last-mile banking infrastructure, and improving grievance redressal mechanisms to ensure that no beneficiary is left behind.