The Centre’s transfer of assorted subsidies and sops to the beneficiaries through the Direct Benefit Transfer (DBT) saw a 21% decline on year to Rs 5.66 trillion in FY24 due to lower outgo on fertiliser and food on falling commodity prices and discontinuation of extra free grains scheme.
On major subsidies through DBT—cash and in-kind – fertiliser continued to top the chart with Rs 1.78 trillion, down 25% on the year as input costs and global prices of fertiliser moderated after rising to record levels in FY23. Fertiliser DBT had reached a record Rs 2.37 trillion in FY23 as the government chose to bear the rise in cost to insulate farmers.
Food subsidies worth Rs 1.27 trillion were transferred to beneficiaries under the public distribution system (PDS) in FY24, down 33% on year as the Centre discontinued the extra free grains scheme which was introduced after Covid broke out in FY21. While the extra grains scheme ended in December 2023, the Centre has waived the nominal Rs 2/3 per kg charged for wheat/rice under PDS for five years under the National Food Security Act.
Since FY14 (when the DBT scheme was launched), benefits worth Rs 35.5 trillion have been transferred to the beneficiaries till now, 53% in cash paid through their bank accounts and the balance as in-kind benefits.
The jump in DBT in FY21 onwards could be largely attributed to COVID-induced benefits as well as higher spending in key subsidies through the use of Aadhaar-enabled DBT platforms.
Thanks to the plugging of leakages, the government’s cumulative DBT savings till FY23-end was about Rs 3.5 trillion. Of this, weeding out of 5.03 crore fake ration cards under the public distribution system for food grains helped save Rs 1.86 trillion (53% of the total savings).
Removal of 4.15 crore fake beneficiaries and 1.13 beneficiaries who gave up their subsidies under the LPG-Pahal scheme helped in savings to the tune of Rs 73,443 crore (21%). Among others, the deletion of 7.1 lakh duplicate beneficiaries under the job guarantee scheme (MGNREGS) yielded gains of Rs 42,534 crore (12%) and Rs 22,106 crore (6%) due to the removal of ineligible PM-KISAN beneficiaries.
While the Centre’s DBT programme is making major headway, many state governments too are giving DBT a further boost by increasingly using it to distribute their subsidies and assorted other sops.