India’s Direct Benefit Transfer system has emerged as a pivotal instrument in transforming the country’s welfare delivery mechanism by plugging systemic leakages and optimizing fiscal efficiency. A recent impact assessment reveals that the DBT system has enabled cumulative savings of 3.48 trillion rupees between 2009 and 2024. It has also slashed subsidy allocations from 16 percent to 9 percent of the total government expenditure, without compromising coverage. In fact, the number of beneficiary instances surged sixteenfold, from 110 million in the pre-DBT era to 1.76 billion by 2024.
The evaluation conducted by the BlueKraft Digital Foundation provides an empirical overview of the DBT system’s role in aligning fiscal discipline with inclusive governance. The report underscores how replacing physical, paper-based distribution of welfare benefits with digitally verified, Aadhaar-seeded bank transfers has led to greater transparency, accountability, and targeting accuracy. The JAM trinity—Jan Dhan accounts, Aadhaar IDs, and mobile phones—has formed the operational core of this transformation.
To objectively measure the system’s impact, the assessment introduced a Welfare Efficiency Index, or WEI, which integrates fiscal performance with social outcomes. The index rose sharply from 0.32 in 2014 to 0.91 in 2023, indicating enhanced reach, reduced leakage, and greater economic prudence. The WEI is based on three weighted components: 50 percent from DBT-related savings, 30 percent from subsidy expenditure reductions, and 20 percent from growth in the number of beneficiaries adjusted for population.
The DBT system has demonstrated remarkable results in key subsidy-heavy sectors. In the food distribution system alone, the government saved 1.85 trillion rupees due to Aadhaar-linked ration authentication, eliminating fake and duplicate entries. This constitutes 53 percent of total DBT-related savings. Under the Mahatma Gandhi National Rural Employment Guarantee Scheme, DBT ensured that 98 percent of wage payments were delivered on time, resulting in additional savings of 42.53 billion rupees. In the PM-KISAN scheme, which provides income support to farmers, the deletion of 21 million ineligible beneficiaries helped save 22.11 billion rupees. Fertilizer subsidies also saw major gains, with savings of 18.70 billion rupees as DBT led to a reduction in the sale of 15.8 million metric tonnes of fertilizer.
Data analysis revealed a strong positive correlation of 0.71 between DBT savings and beneficiary coverage, reinforcing the idea that digital governance need not sacrifice inclusion. Simultaneously, a significant negative correlation of -0.74 was observed between the proportion of subsidy expenditure and welfare efficiency, emphasizing the fiscal advantage of moving toward targeted transfers.
The period between 2009 and 2013 saw annual subsidies averaging 2.1 trillion rupees, accounting for 16 percent of total expenditure. Much of this spending was riddled with inefficiencies and leakages. The implementation of DBT beginning in 2014 initiated a shift in this trend. By 2023–24, subsidies accounted for just 9 percent of the budget, even though the number of beneficiaries had increased sixteen times. The system’s resilience was tested during the COVID-19 pandemic when fiscal allocations temporarily spiked. However, the efficiency of DBT rebounded quickly in the post-pandemic years, reaffirming the system’s robustness.
The DBT framework not only optimized cash transfers but also eliminated ghost beneficiaries and restricted the role of intermediaries. This allowed funds to flow directly to legitimate recipients and enhanced public trust in government programs. The paper highlights that the increase in the WEI over the years reflects a synergy of technological infrastructure, administrative will, and data-driven decision-making.
The cumulative impact has been felt across various layers of society, with benefits reaching rural households, farmers, laborers, and urban poor with greater speed and precision. The integration of biometric authentication, mobile verification, and real-time banking has ensured that welfare delivery is no longer dependent on discretion or local gatekeeping. This has empowered recipients and reinforced democratic access to entitlements.
The Indian DBT model, with its scale and adaptability, is now being recognized as a replicable global framework for efficient and equitable welfare governance. Its success story sends a strong message to other nations that fiscal prudence and social equity are not mutually exclusive goals. Rather, they can be achieved together by leveraging technology, streamlining processes, and ensuring institutional accountability.
As the Indian government continues to refine and expand DBT systems, the findings from this assessment stand as a testament to what digital public infrastructure can accomplish. The lessons drawn from this decade-long journey offer a roadmap for how governments can meet the twin imperatives of financial sustainability and social justice. Through continued investment in technology and data architecture, and with sustained political and administrative commitment, the future of welfare delivery in India promises to be even more efficient, inclusive, and empowering.
