DBT Scam

Context: Central scholarship scam underlines need to tighten checks and balances in DBT architecture, fix accountability

Background

• An investigation by a newspaper has uncovered a nexus of middlemen, government employees, and bank staff were involved in cheating students from minority communities of a centrally funded scholarship in Jharkhand.
• It was found that the officials have bypassed the verification processes and have misused the DBT funds sanctioned by the Union Ministry of Minority Affairs.

What is the need for Direct benefit transfer?

• Direct Benefit Transfers (DBT) was perceived as a solution for the persistent problem of social welfare and subsidy schemes by the elimination of middlemen.
• The use of Aadhaar seeding ensures that nobody else can claim the share of the benefits by impersonation or any other means.
• The recent incident has proved that having a Unique Identification Number (UIN) is no guarantee against being robbed of scholarships, pensions, and other welfare entitlements.

How DBT funds are being misappropriated?

• Bank officials and school staff steal user IDs and passwords to divert benefits from schools that never applied for any grant.
• Middlemen compel parents to forego a big share of their children’s dues.
• Institutions overstate records to apply for scholarship funds.

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There is a need to find effective solutions to strengthen DBT schemes so that social welfare funds and subsidies will reach the intended beneficiaries.