Impact Assessment of Direct Benefit Transfers on Poverty Alleviation
This report aligns with income redistribution strategies and evaluates their effectiveness in reducing poverty in India.
Direct Benefit Transfers (DBT) moved welfare from in-kind delivery and layered intermediaries to direct payments into bank accounts, using Aadhaar and the Jan Dhan network to reduce leakages, delays, and duplication.
In India, this shift became visible through subsidies and social schemes such as LPG support, pensions, scholarships, and MGNREGA wages, where money reaches households with fewer administrative handoffs.
Its poverty impact is strongest when transfers are regular, well-targeted, and large enough to protect consumption during price shocks or job loss; it is weaker when banking access is patchy, biometric failures block payments, or benefit amounts lag inflation.
DBT has also improved fiscal visibility by making subsidy spending easier to trace and audit.
Its wider significance lies in how it has redefined the state’s role in redistribution: less as a distributor of goods, more as a direct payer of entitlements.