Direct Benefit Transfer: A Catalyst for Enhanced Efficiency in Mahatma Gandhi NREGS Implementation

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is one of the most popular wage-generation and social security programs of the government, providing a hundred days of unskilled employment in a financial year to a household in a rural area. Apart from wages, individuals can also benefit from assets created under the scheme. To overcome delays in wage payments, ghost workers, and frauds, Direct Benefit Transfer (DBT) was implemented. The DBT represents a significant evolution in public service delivery aimed at curbing inefficiencies and ensuring more equitable wage distribution. Traditional cash-based wage payments in Mahatma Gandhi NREGS were fraught with delays, corruption, and pilferage, often undermining the program’s objectives of poverty alleviation and rural employment. DBT seeks to address these issues by directly transferring wages into beneficiaries’ bank accounts, ensuring greater transparency and accountability. Existing studies highlight the benefits of DBT in reducing delays and leakages in welfare schemes, yet challenges remain in regions with poor digital and banking infrastructure. This paper uses secondary data to assess DBT’s role in enhancing the program’s performance and explores the effects of DBT on the efficiency of wage disbursement in Mahatma Gandhi NREGS. The authors discuss the challenges faced in rural areas, particularly concerning banking and digital access, and suggest policy recommendations for enhancing DBT’s impact by employing a mixed-method approach. Data from government reports, field studies, and secondary literature will form the basis of the analysis. They suggest that DBT has improved Mahatma Gandhi NREGS performance by streamlining wage payments and enhancing transparency and that targeted reforms would maximize DBT’s potential in rural development and employment creation. Keywords: DBT, PFMS, MGNREGS, Wages, Payments