India’s Direct Benefit Transfer (DBT) system has been globally recognised as a “logistical marvel.” In essence, DBT leverages digital public infrastructure to directly transfer the benefits of various government schemes. Reports indicate that 310 government schemes across 53 ministries have used DBT to reach beneficiaries. DBT has also been used for in-kind transfers to provide subsidised grains via the public distribution system to poor households. Even though the DBT was initiated in 2013, its full potential was realised with the JAM Trinity (Jan Dhan, Aadhaar, and Mobile) post-2017-18. Most discussions on the benefits of DBT have focused on its impact on curbing corruption or reducing leakages, or increasing coverage. It is estimated that DBT has resulted in savings of 1.14 per cent of GDP.
In this essay, however, we would like to focus on another crucial beneficial feature of DBT that has received little attention: DBT preserves the dignity of the poor. Even though dignity might be challenging to quantify, it should be recognised that even without corruption or leakages, the poor would have to undertake a poverty parade to avail government benefits. This change in approach, where instead of the poor availing of government benefits, it’s the government benefits that reach them without an intermediary, has important implications for their psyche. In a civil and humane society, it is essential to recognise that all individuals, irrespective of their economic and social circumstances, have equal rights to dignity.
Before I proceed with my arguments, discussing poverty from different perspectives is imperative. In the dystopian novel The Rise of The Meritocracy, written in the late 1950s, Michael Young argued that in a purely merit-oriented society, there will be two classes. The elite, who believe that “their success is a just award for their capacity, their efforts.” The rest would be those who failed either because they did not try or lacked the capacity. Given that elites were “meritorious”, they legitimately deserved to rule over the poor and the unsuccessful.
Poverty in such a world was an individual’s fault. Though this book was written as a satire, it captured a thought process that became a dominant view among the experts who wanted to eradicate poverty. For these experts, poverty was a technical problem of either lack of resources, lack of capabilities, or lack of self-regulation or discipline. The paternalistic solution was either to provide resources to the poor or to nudge them towards the rightful corrective action to improve their well-being. This sentiment towards poverty eradication was captured in the introduction of the book The Tyranny of Experts by William Easterly.
However, Easterly highlighted that there was an alternative approach to thinking about poverty that did not receive much attention from the experts. Its fundamental premise was that experts must understand poverty from the individual rights perspective or its deprivation. Before providing solutions, experts must understand the historical context that has led to that state of affairs. Rather than looking for technical answers from the outside, addressing poverty might require working with the poor.
Broadly, the rights-based approach highlighted that the state attempts to provide basic security to all its citizens regarding food, shelter, and health. Intuitively, in the rights-based approach to poverty, there is an implicit recognition that people can find themselves in unfortunate economic and social circumstances beyond their control. There could be circumstances when the poor tried and yet did not make it. The corollary to this is that the rich and the powerful owe their success not only to their capabilities but also to luck and other factors beyond their control. In a rights-based approach to poverty, institutions must be designed from the Rawlsian perspective of justice with a veil of ignorance. In such a society, the burden of poverty has to be shared by all members of the society, particularly by the rich and the elite, who have to be more circumspect and humbler about their success.
In the rights-based approach to poverty, it’s not just what we provide to the poor that matters, but also how we provide it. We have to be cognisant in the design of the programmes that while delivering the rightful benefits to the poor, the mechanism is such that their dignity is preserved. Before DBT, the poor would have to knock on the doors of the intermediary elites to receive what was rightfully theirs. They would often be turned away or would have to wait in long lines, which eroded their dignity and deprived them of respect. DBT ended the poverty parade with the government reaching the poor rather than the other way around. In my opinion, restoring the dignity of the poor via DBT is a non-quantifiable but significant benefit that merits attention.
We should attempt to replicate the DBT design in other areas as well. One such area is the judiciary. In November 2022, on the occasion of the 73rd Constitution Day, while addressing the gathering of judges, the first woman tribal President, whose simple and relatable personality, guided by practical wisdom and civic virtue, is an inspiration for all of us, made an earnest appeal to judges in particular and society at large, highlighting the plight of the poor prisoners who have been languishing for years in jails for petty crimes because they do not have the financial or legal resources to fight their cases. She appealed to the judges and government to design a mechanism where justice can reach the poor, not where they have to struggle and fight for justice and still be deprived of it.
We need to think hard about how we can replicate the success of DBT, which leveraged technology to efficiently deliver goods and services to the poor in other areas, such as the judiciary, where justice can be efficiently delivered to the poor. The problem is complex and challenging, but I am sure it is not unsurmountable if we make a collective effort.
The writer is Member, Economic Advisory Council to Prime Minister of India
We need to think hard about how we can replicate the success of DBT
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28.11.2023
India’s Direct Benefit Transfer (DBT) system has been globally recognised as a “logistical marvel.” In essence, DBT leverages digital public infrastructure to directly transfer the benefits of various government schemes. Reports indicate that 310 government schemes across 53 ministries have used DBT to reach beneficiaries. DBT has also been used for in-kind transfers to provide subsidised grains via the public distribution system to poor households. Even though the DBT was initiated in 2013, its full potential was realised with the JAM Trinity (Jan Dhan, Aadhaar, and Mobile) post-2017-18. Most discussions on the benefits of DBT have focused on its impact on curbing corruption or reducing leakages, or increasing coverage. It is estimated that DBT has resulted in savings of 1.14 per cent of GDP.
In this essay, however, we would like to focus on another crucial beneficial feature of DBT that has received little attention: DBT preserves the dignity of the poor. Even though dignity might be challenging to quantify, it should be recognised that even without corruption or leakages, the poor would have to undertake a poverty parade to avail government benefits. This change in approach, where instead of the poor availing of government benefits, it’s the government benefits that reach them without an intermediary, has important implications for their psyche. In a civil and humane society, it is essential to recognise that all individuals, irrespective of their economic and social circumstances, have equal rights to........
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