'DBT Scheme Excludes Middlemen, But Also Deserving Beneficiaries'

The scheme, which currently encompasses 314 schemes under 53 ministries, has managed to disburse Rs 24.3 lakh crore to beneficiaries through digital channels. While number of beneficiaries and amount transferred has dipped in the past two years, researchers have highlighted factors that exclude people from the scheme benefits.

Under Direct Benefit Transfer, there exist various exclusionary factors that impede a citizen's access to welfare schemes along the entirety of the delivery chain, found a survey conducted by Dvara Research, a Chennai-based policy research institution, in collaboration with diverse social impact field partners between 2020 and 2022. In the State of Exclusion report, the researchers explored the fault lines within the existing DBT system and provided policy recommendations on how the process can be further streamlined to address last-mile grievances.

FactChecker spoke to Aishwarya Narayan, Research Associate at Dvara's Social Protection Initiative, to gain more insight into how issues pertaining to accessibility, transparency and accountability impact the beneficiaries of welfare schemes. Excerpts:

Direct Bank Transfers are an example of how technology has eliminated middlemen. But what we don't pay attention to are the more fundamental problems that still exist in the system that beneficiaries face. Can you please highlight these based on your research?

Before the advent of DBT, one of the biggest concerns with the delivery system of social protection were middlemen who syphoned off sums of money away from beneficiaries. While over the last nine years some of these leakages have been plugged, certain loopholes still persist.

The first one being a very fundamental infrastructure and access problem. Just because we are now using a digital system for payment doesn't change the fact that there aren't enough access points for the citizen at the last mile to enrol into a scheme, or even for the citizen to withdraw the money that they're entitled to, as part of a scheme.

From our study, we've seen that about 32% of the scheme enrolment issues are primarily related to access.

The second loophole is transparency and accountability. All the information about the scheme and people's status in the scheme comes through this digitised system, but very often the information doesn't reach them in the easiest possible manner. Researchers often called the DBT system a 'black box', because the citizens don't know what's happening.

It's very difficult to ascertain what are the reasons for failures in payments that happen through the DBT system. That's an important point of advocacy for us at Dvara, because we believe the reasons and number of transaction failures should be made public knowledge.

The final problem is that official grievance redress channels are actually not being used as much as they should be. Even if a digital system is solving a large issue, it is likely to cause some form of exclusion. It also causes certain inconveniences which did not exist in the past.

India has a complex social protection system with a number of central and state government schemes. At the pre-entry stage, how can beneficiaries be targeted in a better manner so the schemes are more inclusive?

We haven't done as much extensive fieldwork on the pre-entry stage though. But the types of targeting methods or methodologies that we have right now on how a department decides who qualifies for a particular scheme are actually quite narrow.

It is so because they are actually designed to keep those who are ineligible out of the scheme. It would be far more beneficial if these targeting methods were actually designed to identify the eligible, and not weed out the ineligible, to the best extent possible.

The Census and other surveys we use to target beneficiaries are also quite outdated. It's been more than 10 years since the last Socio-economic Class Census (SECC) was conducted. So, there's a good chance that the administration is targeting people who were actually vulnerable 10 years ago, but not targeting those vulnerable today.

That said, we do see potential for improvement, because over the last three or four years, we've seen a lot of state governments come up with the idea of having some kind of citizen databases for identification. However, these databases do come with their own set of risks.

Globally, the call for more inclusive targeting is actually leaning towards the universality of social protection. The literature tells you to start relaxing the number of requirements and stop having so many filters on beneficiaries. Targeting methods shouldn't be so narrow.

The Centre has time and again claimed that the world's largest DBT system is working in India. In fact, in May, PM Modi claimed that in the past 7-8 years, the Government of India has sent more than Rs 22 lakh crore by direct-bank-transfers to the accounts of beneficiaries. In your research, did you find if these numbers are true on ground and if all these people are actually benefiting as much as it's claimed?

I'll preface this by saying that while we have done extensive fieldwork, we have so far not tackled a sample size which is big enough to be scalable at a national level. Also, the government has done a fairly good job of using the DBT system to disperse emergency transfers, of reaching a large number of people even during the pandemic, which it may not have been able to in an offline system.

That being said, in our research we have come across certain problems in the backend processing of these transfers, which we believe are being underreported. And so maybe the system itself doesn't have a sense of how big the problem is because we don't see those numbers actually coming out in the public.

In our survey, about 72% of the participants across three states said they experienced some type of issue during the processing of their payments. They gave us a range of reasons for this disruption — irregular schedule of payment, lower quantum of payments, bank account-related issue, error in application form, etc.

Due to lack of technical know-how and/or devices, beneficiaries often reach out to Common Service Centres. What is the level of accessibility and inclusivity of the CSCs?

The offline backbone of the direct benefit transfer system has been the network of common service centres (CSC) across the country. For a lot of people, proximity to CSCs is a problem. While the number of CSCs has increased, there's roughly about one CSC per panchayat and the results from our survey clearly indicate that citizens face access issues.

The other part of the problem is the functioning of the CSC and that really comes down to proper conduct of the agent at the last mile. In remote villages, there isn't much of an oversight mechanism. So, what ends up happening is somewhat of an overcharging for many types of services. We know from the results of a 2019 Dvara study that for banking services, overcharging happens at about 34% of the centres. This figure is either similar or higher for other categories of services as well.

It will be vital in the next couple of years for the government to address these issues and ensure that this network of CSCs is a solid base for all the digitisation that is yet to come.

The 'State of Exclusion' report talks of a nationalised Grievance Redressal Mechanism (GRM) that can be set up for DBT beneficiaries. How do you think India should approach to build a nation-wide system like that, which is both user friendly and efficient?

The importance of having a unified GRM is to give citizens a channel to contest their problems. If you're excluded from the scheme, there is still a channel to voice that concern, and potentially be re-included, so it acts like a re-entry loop. The creation and consistent use of a GRM will make the entire DBT system much more user friendly.

For the administrator too it is important to have a GRM spread across entities and tiers, across blocks, districts and states. It would give the government a bird's eye view of where things are going wrong in the system. If they are able to understand where certain pain points arise, they can assess the need for correction.

A question that we, at Dvara, have also been contending with, is about the ideal role of various entities involved in the DBT process. A simple DBT payment from one department to one citizen's bank account actually involves a large number of entities. It involves the government department, the citizen's bank, the government's bank, National Payments Corporation of India, the Unique Identification Number, and so on.

Depending on where exactly the grievance arises is how one can decide which entity is responsible. A nation-wide GRM forum would therefore, streamline the complaints and re-assign the resolution to the concerned authority.