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.

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