New Delhi: Finance minister Nirmala Sitharaman explained how the government saved up to $40 billion through direct benefit transfers. Sitharaman, who is visiting the US to attend the annual meeting of finance ministers and central bank governors at the IMF and World Bank, said during a talk at the Wharton Business School that more than 51 departments and ministries in India conduct DBT having transferred cumulative funds to the tune of $450 billion in 8 years.
In the video interaction, Sitharaman added that DBT also helped the government check pilferage to the tune of $40 billion. This assumed greater importance since it was her job to prevent the wastage of every rupee of taxpayers’ money, she added.
How DBT helped check pilferage
The government had cracked down on ghost accounts and fraud through DBT, she added. Digital transactions ensured transparency, eliminating manual pilferage, the finance minister said. Every rupee to the state in India goes through an account. This will be expanded to transactions between the Centre and the states, she added.
Another upside of this practice is that small ticket loans are being routed digitally, leaving a paper trail and ensuring transparency, Fortune India reported. Online records ensure timely disbursal in a targeted manner based on the borrower’s credit history, Sitharaman explained.
DBT or direct benefit transfer allows cahs credits directly into the beneficiary’s bank account by the government. The bank account is Aadhaar seeded and linked to a verified mobile number, ensuring transparency in disbursals.
After UPI, time for ULI revolution
She attributed the success of the Indian economy to the little things such as Digital India exemplified by the Unified payments Interface (UPI) which has revolutionised peer-to-peer and peer-to-merchant small ticket transactions. Now, the RBI is helming the unified lending interface to revolutionise small-ticket online borrowing and eliminate fraud from India.
Sitharaman warns against ‘blindly accepting FDI’
While expounding the benefits of DBT and the digital revolution in India, Sitharaman paused to warn that India will blindly accept FDI from countries in the pursuit for progress, reiterating India’s strategic stand on investments into the country.
The statement was made with an eye on China, whose Belt and Road Initiative has bankrupted several economies across the world, including neighbouring Sri Lanka. “We want business, we want investments but we also need safeguards… India is in a very sensitive neighbourhood,” said Sitharaman.
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