Practitioner Insights: improving the delivery of direct benefit transfers

Drawing lessons from an evaluation in India.


Direct benefit transfers (DBTs) are currently being used in social protection programmes across the country, with the aim of reducing leakage and inefficiencies in receipt of entitlements. Successive governments have stressed the importance of DBTs as the best way of ensuring benefits reach the right people, at the right time, reducing leakage in the process. The use of direct benefit transfers also raises questions around digitization of government schemes and the capacity required to implement them effectively. In the past few years, several studies have mapped implementation of, and community experiences with, direct transfers. Drawing on previous work on direct benefit schemes, I have identified three avenues where technology-aided programmes could be improved:

  • systems design;
  • personnel; and
  • beneficiary awareness and grievance redressal.

[button-link text="Explore the rest of our Practitioner Insights series" link=""]

Systems design

Ensuring that programme software is adequately aligned to the needs of implementing officials is necessary to improve service delivery. Software systems design underpins how data is used (entry, processing and monitoring) for any transfer scheme in India. While software design is intended to simplifying functioning, it often mimics hierarchical, bureaucratic structures. It is crucial that programme software is designed with a keen eye on usability, and involves implementers in design discussions. In the absence of this, the problems that plague ‘paper programmes’ persist in digital systems.

Programme software has the potential to generate data which can be useful in guiding implementation decisions on the ground. The ability to track real time performance of schemes and adapt accordingly is important in improving operational efficiency. Unfortunately, reviews of system operations have identified that conversations between software designers and implementers are limited. In certain instances, this has led to digital systems which amplify existing faults within state capacity rather than alleviating them.

In the recent assessment of a maternity benefits cash transfer, implementing officers reported that while monitoring data on performance of different districts was available, it was accessible only at the block level. This required state officials to make requests to individual blocks to access, and then aggregate, data. Important data that could guide programme implementation in real time was not easily accessible.


Implementation guidelines need to account for the functional competencies needed to deliver digitised schemes. Without this, such schemes will face the same delays and inefficiencies as before. Digitised delivery of social protection benefits requires different capacities and processes. For example, in most schemes registration forms and requisite data are submitted to the frontline worker. These forms are then transferred to the digital interface either by the frontline worker or a data entry officer embedded with the government. Thus, additional personnel and support is required to shift data from physical forms to the programme software.

A process mapping study a direct benefit transfer scheme highlights the importance of accounting for these personnel in the scheme guidelines and the budget. In this scheme, inadequate resource allocation for crucial functions such as data entry operators led to a backlog in data entry within the system, increasing chances of erroneous entries and leading to delays under the programme. Existing staff face enormous pressure to deliver on the promise of a smooth, quick implementation process, without having the adequate resources needed to deliver on these tasks.

Beneficiary interaction and grievance redressal

While the use of DBTs has the potential to increase transparency, it also alters the nature of interaction between the citizen and the state. It is important that DBT schemes set up robust grievance redressal mechanisms and information kiosks. Many beneficiaries are used to interacting with frontline workers or local government officials for scheme related grievances. In a digital system, traditional intermediaries (such as frontline workers and local panchayat leaders) have limited information or power. This creates an information asymmetry for some beneficiaries who are now required to navigate information in the digital world. For example: under direct transfers, money is automatically credited to the bank account of the beneficiary. Qualitative inquiries of DBT schemes reveal most beneficiaries do not know when money is transferred into their account. They make repeated trips to banks or to the frontline worker to garner information about the transfer. Frontline workers often do not have information on exact transfer dates, leaving the beneficiary with little recourse. Trips to banks can be expensive and some beneficiaries find it intimidating to interact with the official banking system. This leaves a crucial information gap on receipt of transfers, and any delays.

Given the large proportion of financially illiterate beneficiaries served in these schemes, it would be important that reliable information on receipt of transfers is communicated. Additionally, an accessible and robust grievance redressal system would help monitor scheme implementation and improve accountability. In the absence of this, beneficiaries are met with an opaque and confusing system where traditional modes of information and grievance redressal are redundant.


To realise the true potential of technology aided solutions in governance, they must be accompanied by a complementary investment in the processes and personnel delivering these digital systems. Technology, specifically direct benefit transfers, has the ability to improve service delivery and governance in India. DBTs are expected to: ensure accurate targeting, reduce duplication, reduce fraud and corruption, lead to simpler information flow, increase accountability and eliminate any wastage. Several studies have investigated the returns to investing in payments infrastructure relating to DBT and found them to be ‘large and positive’. This paper highlights key challenges in state capacity to deliver these solutions. Operational inquiries indicate that technology aided systems, if not designed well, can replicate the same opaque hierarchies found in paper-based programmes. Technological solutions, without accompanying delivery mechanisms, can magnify challenges to social protection delivery rather than reducing them.

Shruti Viswanathan is a public governance and systems delivery expert with Oxford Policy Management.

[button-link text="Explore the rest of our Practitioner Insights series" link=""]