The notion of public service delivery in India has been synonymous with the idea of a large government. However, given its large population size and vast geographical spread, the Indian state has repeatedly been identified as lacking the human resources to undertake the logistics of efficient government transfers. Hence, to cover this gap in state capacity, the government has relied on a complex web of intermediaries (both government and non-government officials/individuals) to bridge the gap between itself and the citizens responsibly. However, this dependence on local intermediaries has created problems like fund leakages, targeting errors, arbitrary and discriminatory use of power, etc. The issue became even more pronounced within the marginalized sections of society, which relied on extensive government support but, in reality, were the most deprived. This led to a situation where progress on numerous socio-economic parameters was halted.

Much work has been published highlighting the economic benefits of DBT (Direct Benefit Transfer). However, not enough attention has been given to the humiliation faced by the beneficiaries in the previous regime, which was characterized by an excessive reliance on intermediaries. This article focuses on understanding the traditional method of government transfers and how DBT has brought about a change in this regard.

UNDERSTANDING HUMILIATION IN TRADITIONAL GOVERNMENT TRANSFERS

Humiliation, in the context of government transfers, can be understood as the erosion of an individual’s dignity due to the creation of unequal power dynamics between the beneficiary and the government, resulting in exploitative relationships. The source of humiliation was the lack of supervision of local officials, leading to an arbitrary exercise of power. Further, the local power dynamics of social status impacted the ease of access to government transfers. Hence, to gain a better understanding, it is important to devise a typology of humiliation along each step of the process in availing entitlements.

1. Humiliation in enlisting as a beneficiary—People often had to make multiple rounds to government offices just to be enlisted as beneficiaries for a particular program due to a lack of access to local officials and unclear instructions regarding the documentation required.
2. Humiliation in accessing government transfers—The lack of information on the status of fund disbursement for a particular scheme contributed to a situation where people had to visit government offices multiple times. This, coupled with the inhumane behavior of staff at these offices, created unequal power dynamics.
3. Humiliation in the case of not receiving government transfers—The traditional regime of public service delivery was notorious for excluding deserving beneficiaries and irregular fund transfers. This led to a reliance on informal moneylenders to cover expenses. Money from these sources not only came at exorbitant interest rates but also eroded the dignity of the borrower by creating an exploitative power dynamic.

The impact of decades of humiliation widened the gap between the government and citizens, leading to a deficit of trust in the government’s ability to provide adequate support and a safety net for the needy.

FROM HUMILIATION TO DIGNITY: THE TRANSFORMATIVE ROLE OF DBT

In 2014, the decision of the newly formed government under the leadership of Prime Minister Narendra Modi to launch a flagship financial inclusion scheme, the Pradhan Mantri Jan Dhan Yojana, not only expanded the scope of the Direct Benefit Transfer (DBT) framework—making huge inroads in solving the problems of financial leakages and targeting errors—but also brought dignity to government transfers. DBTs, resting on the foundation of the Jan Dhan, Aadhaar, and Mobile (JAM) trinity, eradicated the reliance on intermediaries and provided beneficiaries with protection from humiliation in the following ways:

1. Dignity in enlisting as beneficiaries—DBT has ensured that the standard operating procedures for enrolling in a scheme are clear and straightforward, which reduces information asymmetry, leading to lower transaction costs and zero humiliation. Furthermore, DBT has also introduced a method of self-enlistment through online portals, which any potential beneficiary can access. This eliminated problems arising due to unclear instructions and the dismissive attitude of government officials.
2. Dignity in accessing government transfers—DBT has guaranteed that funds are directly transferred to the beneficiary’s bank account without any leakages and targeting errors. Furthermore, mobile banking has ensured that the beneficiary receives a notification as soon as the fund is received in their bank account.
3. Dignity in case of not receiving any government transfer—In the rare case of a mismatch of Aadhaar and bank information leading to cancellation of fund transfer, DBT ensures that the intended beneficiary is notified of the error to make sure they can make the necessary changes in the documentation to ensure a timely resumption of fund transfers. Furthermore, inclusion in the formal banking system has ensured that people have access to several other government benefits, as well as credit and loans at significantly lower interest rates when compared to informal sources.

REAL-WORLD IMPACTS: DBT’S SUCCESS IN RESTORING DIGNITY

The shift from a traditional delivery mechanism to the DBT framework holds potential not just on paper. Numerous schemes have displayed the positive change brought on by incorporating dignity into the whole process, as seen in the following cases: 

Cash transfers—The National Social Assistance Programme (NSAP), which began in 1995, aims to assist vulnerable populations. Since 2009, NSAP has included (but is not limited to) three pension schemes providing financial support to aged persons, widows, and people suffering from disabilities. A switch to using DBT to transfer benefits has not only increased the financial efficiency of NSAP but also ensured that intended beneficiaries receive their entitlements in a timely and regular manner without navigating the apathetic labyrinth of local intermediaries.  

DBT has brought a similar transformation in the domain of educational scholarships. In the past, students had to make multiple rounds of government offices to track the status of their scholarships, which were often arbitrarily rejected or frequently delayed. The problem was more pronounced among students belonging to SC/ST communities. DBT, in recent years, has ensured that the fund reaches students’ accounts directly without any delays, resulting in dignity in accessing their entitlements. Furthermore, it has ensured that no student is discriminated against due to their social status by eliminating intermediaries who often engage in such practices. 

DBT, with its ability to efficiently target and transfer benefits, has also unlocked possibilities for policymakers to adopt more innovative approaches to support the government. One notable initiative in this regard is the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), which provides a sum of Rs 6,000 to small and marginalized farmers. The untied nature of transfer highlights a recognition by the government that beneficiaries should be provided with an agency to decide the patterns of fund utilization. By removing the state’s micromanagement of benefits, these unconditional cash transfers acknowledge the autonomy of the individual, a core aspect of dignity.

Aadhar-enabled in-kind transfers—A research study has documented the siphoning of food grains to black markets in the Public Distribution System till 2014. People often faced discrimination or administrative malpractices while collecting their allocated ration quota at local fair price shops. DBT, enabled by Aadhar-based biometric authentication, has significantly reduced room for biases and favoritism at the local level, paving the way for equitable access to food. Moreover, digitizing beneficiary information has allowed initiatives like the “One Nation One Ration Card” to bring dignity to migrant workers’ access to benefits.  

Fertilizer disbursement has seen a similar improvement, where traditionally a substantial quantity of subsidized fertilizer was diverted to black markets (often used for industrial purposes) or utilized by people with influence at the local level in quantities greater than their allocation. Small farmers, usually belonging to marginalized communities, could not obtain subsidized fertilizers. Now, with the Aadhaar-enabled Fertilizer Distribution System (AeFDS), every purchase of fertilizer at the retail outlet requires the buyer’s biometric authentication. This has ensured that the subsidy is accessed by actual cultivators regardless of their social identity.

EMPOWERING INDIA’S FUTURE THROUGH DIGNIFIED PUBLIC SERVICE DELIVERY  

The Direct Benefit Transfer (DBT) scheme marks a turning point in the history of Indian public service delivery, bringing a level of financial efficiency never seen before and restoring dignity to government transfers. By streamlining the process of availing benefits, DBT directly empowers individuals, affirming their autonomy and strengthening their claim towards entitlements. Its impact is especially transformational for people from marginalized communities. This approach fosters greater trust between people and the government, creating an environment conducive to inclusive growth and stronger social harmony. As India works towards becoming a developed nation by 2047, DBT has presented itself not just as any policy reform, but rather as a transformative tool driving India’s comprehensive socio-economic progress.

The views and opinions expressed here belong solely to the author and do not reflect the views of BlueKraft Digital Foundation.