DBT scheme transforms India's welfare landscape, achieves Rs 3.48 lakh crore in savings: Report

This policy paper synthesises 15 years of data (2009–2024) to demonstrate how DBT transformed India’s welfare architecture from a leakage-prone, subsidy-heavy model into a targeted, efficient mechanism

India’s Direct Benefit Transfer (DBT) scheme, introduced in 2013, has reshaped the country’s welfare delivery, setting a global benchmark for efficiency and inclusivity.

BlueKraft has assessed the transformative impact of DBT over the past decade (2009-2024), highlighting a series of impressive achievements in a new report. The analysis reveals transformative results, including cumulative savings of Rs 3.48 lakh crore through leakage reduction, a halving of subsidy allocations (16% to 9% of total expenditure), and a 16-fold expansion in beneficiary coverage (11 crore to 176 crore).Key findings of the report

Fiscal Optimization: Despite a rise in welfare budgets (Rs 2.1 lakh crore in 2009– 10 to Rs 8.5 lakh crore in 2023–24), subsidy allocations declined proportionally, reflecting DBT-driven efficiency.

Sectoral Impact: Food subsidies accounted for 53% of total savings (₹1.85 lakh crore), while programs like MGNREGS and PM-KISAN achieved 98% timely wage transfers and Rs 22,106 crore in savings, respectively.

Enhanced Targeting: Aadhaar-linked authentication eliminated ghost beneficiaries, enabling coverage expansion without proportional fiscal.

This policy paper analyzes DBT’s transformative impact over a 15-year span (2009– 2024), combining empirical data from Union Budgets, Ministry of Finance reports, and the DBT portal with advanced analytical tools, including correlation analysis and the proprietary Welfare Efficiency Index (WEI). The study addresses critical questions: How has DBT influenced budgetary efficiency? Can reduced subsidy allocations coexist with expanded beneficiary coverage? What lessons does India’s experience offer for global welfare governance? By quantifying DBT’s fiscal savings (₹3.48 lakh crore), its role in halving subsidy burdens, and its success in scaling beneficiary access 16-fold, this paper provides a rigorous evidence base for policymakers. It also confronts prevailing narratives around “declining welfare spending,” demonstrating instead how strategic digitization has optimized resource utilization to achieve broader, more equitable outcomes.

By leveraging Aadhaar-linked authentication and technology, DBT has eliminated ghost beneficiaries, ensuring that subsidies are reaching those who need them most.

Over the past 15 years, India’s welfare budgets have soared—from Rs 2.1 lakh crore in 2009–10 to Rs 8.5 lakh crore in 2023–24. Despite the rise in budgets, the percentage of funds allocated to subsidies has halved—from 16 per cent to nine per cent.

This reduction in subsidy allocations has not only contributed to fiscal prudence but has also expanded the reach of welfare programs. The number of beneficiaries has grown from 11 crore to 176 crore, underscoring the success of DBT in scaling up coverage without proportional fiscal increases.

Food subsidies alone accounted for 53 per cent of the total savings (Rs 1.85 lakh crore), with other key programs such as MGNREGS and PM-KISAN showing notable successes. The MGNREGS program achieved 98 per cent timely wage transfers, and PM-KISAN generated Rs 22,106 crore in savings.

Despite criticism that DBT might have reduced welfare spending, the evidence points to a that optimises resource utilisation. Through targeted cash transfers, India has expanded welfare coverage while reducing overall expenditure, ensuring that fiscal responsibility and social equity can coexist.

The newly developed Welfare Efficiency Index (WEI) has skyrocketed from 0.32 in 2014 to 0.91 in 2023, signalling systemic improvements in welfare delivery. DBT’s impact demonstrates how technology can streamline government spending and better serve citizens.

As India moves towards its “Viksit Bharat” goal, this analysis not only demonstrates the power of digitisation in transforming welfare but also offers a blueprint for future-ready governance.

India’s Direct Benefit Transfer (DBT) system, conceived in 2013 and aggressively scaled post-2014, has redefined welfare governance by harmonising fiscal prudence with social equity.

This policy paper synthesises 15 years of data (2009–2024) to demonstrate how DBT transformed India’s welfare architecture from a leakage-prone, subsidy-heavy model into a targeted, efficient mechanism.

Looking ahead, DBT’s success positions India to achieve its Viksit Bharat 2047 vision— a developed, inclusive nation. By redirecting savings into healthcare (Ayushman Bharat), agriculture (PM-KISAN), and rural employment (MGNREGS), DBT aligns welfare delivery with sustainable development goals.

However, challenges persist: rural digital divides, exclusion errors, and evolving fraud tactics demand continued innovation. Future steps must prioritise AI-driven fraud detection, last-mile banking infrastructure, and robust grievance redressal to ensure no beneficiary is left behind.

*With Agency Inputs