India’s Direct Benefit Transfer (DBT) system was introduced with the promise of eliminating leakages, ensuring transparency, and delivering welfare benefits directly into the bank accounts of eligible citizens. However, a recent audit by the Comptroller and Auditor General (CAG) has raised serious concerns about whether this money is consistently reaching the intended beneficiaries.
According to the CAG’s latest audit report, several government welfare schemes are facing implementation challenges, resulting in funds being transferred to ineligible, inactive, or incorrectly verified accounts. The findings suggest that while DBT has improved efficiency in theory, gaps in execution are undermining its core objective.
The audit highlights issues across multiple flagship schemes, including LPG subsidy programs, farmer assistance initiatives, and social pension schemes. In many cases, the eligibility verification process was found to be weak or outdated. As a result, benefits continued to be credited even when beneficiaries no longer met the criteria or when accounts were inactive.
One of the key problems identified was outdated beneficiary data. Several databases had not been updated regularly, leading to transfers being made to dormant accounts or to individuals who were no longer eligible under the scheme guidelines. This not only defeats the purpose of targeted welfare delivery but also results in inefficient use of public funds.
The government often describes the JAM Trinity—Jan Dhan accounts, Aadhaar, and Mobile numbers—as the backbone of the DBT ecosystem. However, the CAG report points out that even this foundational framework has notable shortcomings.
The audit found that a significant number of Jan Dhan accounts have remained inactive for long periods, yet government benefits continued to be deposited into them. In such cases, the money either remained unused or its final utilization could not be properly tracked.
Additionally, incomplete Aadhaar linkage and outdated or missing mobile numbers have hampered effective monitoring. Without proper linking and updated contact details, authorities face difficulties in tracking transactions, verifying beneficiaries, and resolving errors or grievances in real time.
Another major concern raised by the CAG is the lack of coordination among different government departments. Welfare schemes are implemented by multiple ministries and state agencies, but the absence of a centralized, real-time beneficiary database has led to duplication, overlaps, and inconsistencies.
In several instances, the same individual appeared across multiple schemes without proper cross-verification, while in other cases, genuinely eligible beneficiaries were excluded due to data mismatches. The CAG emphasized that without seamless data sharing and integration, the DBT system cannot achieve optimal efficiency.
The report warns that these shortcomings have broader implications. When funds are diverted—intentionally or unintentionally—to the wrong accounts, it dilutes the impact of welfare schemes and increases the financial burden on taxpayers.
Public money that could have been used to strengthen healthcare, education, or infrastructure ends up being locked in inactive accounts or reaching unintended recipients. Over time, this erodes public trust in welfare programs and raises questions about accountability.
The CAG has recommended regular data audits, timely updating of beneficiary records, and stronger inter-departmental coordination to address these issues. Improving Aadhaar authentication, ensuring active Jan Dhan accounts, and maintaining updated mobile numbers are seen as critical steps to strengthen the DBT framework.
Experts believe that while DBT remains a powerful tool for welfare delivery, it requires continuous monitoring, technological upgrades, and administrative vigilance to function as intended.
The CAG’s findings do not suggest that DBT has failed, but they clearly indicate that systemic loopholes need urgent attention. As India continues to rely heavily on direct transfers for social welfare, plugging these gaps is essential to ensure that government support reaches those who truly need it.
Ultimately, improving transparency and accuracy in DBT is not just about saving money—it is about protecting the credibility of public policy and ensuring inclusive growth.
