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Thursday, August 18, 2022

What’s in a number

Lack of transparency and accuracy on the direct benefit transfer scheme could end up undermining its efficacy.

On September 30, the International Institute for Sustainable Development released a study that asserted that the Central government’s claim of saving Rs 12,700 crore in 2014-15 on account of the direct benefit transfer (DBT) scheme in LPG (or Pahal) was a large overestimation. The actual savings, according to the IISD, were just one per cent of the government’s claim. IISD’s calculations were based on publicly available information about the number of districts covered, extent of under-recoveries (or subsidy per cylinder of gas), proportion of bogus or fake accounts, etc. But even after assuming the most optimistic scenario, the maximum savings possible were pegged at just Rs 143 crore. This was in stark contrast to the much bigger number that had been widely reported in the past. Chief Economic Advisor Arvind Subramanian’s office has accepted that the Rs 12,700 crore figure does not pertain to 2014-15.

Several reports have detailed how direct benefits or cash transfers can reduce the massive leakages that plague India’s social-sector spending. The misleading claim on the amount of money saved, therefore, could turn out to be an own-goal, undermining a much-needed reform. Of course, there are many who doubt the merits of a shift towards a DBT regime. Some key concerns relate to the inadequacy of systems in place to make such a reform work. If the DBT scheme is launched without due diligence, the argument goes, it would lead to a lot of people being excluded by design. The failed pilots in Kotkasim (Rajasthan) and Puducherry are repeatedly pointed to. In May 2014, even the S.G. Dhande Committee that looked into the DBT for LPG said that “the speed at which it was rolled out and the inclusion of low Aadhaar districts gave rise to consumer grievances”.

This misstep by the government may have given ammunition to those who oppose the reform. But it must be underlined that if properly implemented, the scheme will not only bring significant savings for the national exchequer but also make it possible to target the intended beneficiary. Building a consensus for reform in India has been a tough task. The DBT is one reform that enjoys considerable public acceptance. The government should ensure this trust is not breached. Maintaining transparency would be a good first step.

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First published on: 08-10-2015 at 12:15:13 am
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