IMF lauds DBT scheme, calls it 'logistic marvel'

Tags: Economy/Finance Government Schemes

The International Monetary Fund (IMF) on 12 October 2022 lauded the Direct Benefit Transfer (DBT) Scheme in India and described it as a "logistical miracle" considering the country's sheer size.

Important facts

• The International Monetary Fund's deputy director, Paolo Mauro, said India's plan is a "logistic marvel that has helped hundreds of millions of low-income people".

• He said that countries across the world should learn from the DBT scheme as it is very impressive.

• He said that this program is specially targeted towards women, elderly and farmers and the technological innovation involved is commendable.

• IMF Chief Economist Pierre-Olivier Gourinches said that India has emerged as a bright light at a time when the world is facing imminent prospects of recession.

• Gourinchas said that India needs some significant structural reforms to achieve the ambitious target of a $10 trillion economy.

• The Chief Economist lauded India's digitization efforts and termed it as a game changer.

Direct Benefit Transfer (DBT) Scheme

• The process of transferring the subsidy amount directly into the account of the beneficiaries instead of providing it directly to the government offices is known as DBT.

• In this context, transfer can be defined as the payment that the government makes directly to the beneficiary without receiving any return. Scholarships and subsidies are some examples.

• The Direct Benefit Transfer (DBT) Scheme was introduced on 1 January 2013.

• Its main objective was to reform the government's distribution system and redesign the existing process in welfare schemes by making the flow of money and information faster, safer and fraud-free.