What does Direct Benefit Transfer change about the way a subsidy reaches a beneficiary?

It pays the money into the beneficiary's own bank account instead of subsidising the goodsCorrect answerYour answerIt raises the amount of the subsidyCorrect answerYour answerIt replaces the subsidy with a tax exemptionCorrect answerYour answerIt transfers the subsidy to the state government instead of the CentreCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Under DBT the money goes into the beneficiary's own bank account rather than being used to sell a good below cost.
The beneficiary then buys at the market price, so the shortening of the chain is the whole point.
The amount is a separate decision; DBT changes the route, not the size.

Worth noting

The cooking gas subsidy was the first large scheme moved onto DBT, and remains the standard example.

Concept: What Direct Benefit Transfer changes
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsEmployment, poverty and welfare

Practise this chapter →

Ten questions from Indian Economy & Institutions, at your own pace.

What does Direct Benefit Transfer change about the way a subsidy reaches a beneficiary?

Explanation