Direct Benefits Transfer (DBT) scheme, the ambitious programme of the Centre to give subsidy and scholarship amounts directly to beneficiaries, will be rolled out in 20 districts of seven states, including three in Karnataka, and two Union Territories on Tuesday.

The DBT, with the slogan “aap ka paisa aap ke haath” (your money in your hands), will be introduced in a phased manner. The “game changer” scheme, as described by the Congress and the UPA government, will spread across the country by the year-end.

Under the scheme, cash will be transferred directly to the bank or post office accounts of identified beneficiaries. The Centre plans to bring 26 programmes, including pensions, scholarships, MGNREGS, etc., under the DBT scheme. Cash transfer for Public Distribution System (PDS), LPG, fertiliser or kerosene would be covered later.

From Tuesday, an estimated two lakh beneficiaries will start receiving benefits through the new arrangement. Disclosing this to journalists on Monday, Finance Minister P Chidambaram and Information and Broadcasting Minister Manish Tewari said that the purpose of DBT is to ensure that benefits go to individual bank accounts electronically, removing delays and diversions.

Beneficiaries in Mysore, Tumkur and Dharwad districts in Karnataka and North-East Delhi and North-West Delhi would be among the initial participants in the DBT from Tuesday.
Chidambaram said the scheme would be introduced in 11 other districts from February 1, 2013 and 12 districts from March 1, 2013, covering 43 districts in 16 states. He, however, said it would not right away cover all the 26 programmes in these districts. It will be done in stages according to the preparedness of these districts

He said the 43 districts were selected on the basis of the maximum number of beneficiaries having bank accounts and Aadhar number. Under the scheme, having a bank or post office account is a must although Aadhar is not, at least initially. In schemes like scholarships, the amount may be directly transferred to the college concerned, he added.

“We are proceeding with caution... On January 1, seven schemes (mostly relating to scholarships) in which payment is due in (20 selected) districts, the money will be transferred through the DBT,” he said.

On the method of withdrawal of money, the Minister said there were 7,900 bank branches in 43 districts and each of them would be asked to open ATMs. “Initially, beneficiaries will be able to withdraw from their own bank branches or ATMs or Business Correspondents (BCs) wherever they exist. The system of micro-ATMs and multiple BCs will roll out subsequently with full inter-operability gradually,” he said.

Noting that the scheme would have some inadvertent glitches, Chidambaram said bringing LPG, food, etc., will be a complicated process. “At the moment, there is no intention to transfer subsides on food, fertiliser, LPG and kerosene through the DBT.
Here, existing system will continue because they are complex issues,” he said. On subsidy on LPG, the Minister clarified, “I don't know when it will be covered. It is not covered in the first phase.”