QUESTION 6
GS3
12.5 marks
In what way could replacement of price subsidy with Direct Benefit Transfer (DBT) change the scenario of subsidies in India? Discuss.
WRITE IN
9 min
200 words
What the examiner wants
Discuss how moving from price subsidies to DBT changes the subsidy system.
DiscussExplain the different sides of the issue, use evidence, and finish with a balanced view.
Demand-wise check
- 1Price subsidy problems: leakages, diversion (kerosene, LPG to commercial use), ghost beneficiaries, market distortion≈35 words
- 2DBT gains: JAM-based targeting, removal of duplicates, market pricing, fiscal savings, choice for beneficiary≈35 words
- 3Risks: exclusion due to Aadhaar or bank failures, price rise eroding cash value, last-mile banking in remote areas (Jharkhand PDS pilot)≈35 words
- 4Design: phased rollout, indexing, grievance redress≈35 words
Open in about 30 words and close in about 30.
Answer plan
Problems of price subsidiesDBT advantagesRisksDesign fixesConclusion
Where marks usually go
- Only praising DBT
- Not explaining 'change in scenario' - fiscal and market effects
Draw this
- Before-after flow of subsidy delivery
Value addition
- SchemePAHAL (DBT for LPG), relaunched in January 2015, entered the Guinness Book as the world's largest cash transfer programme.MoPNG, 2015
- ReportEconomic Survey 2014-15 proposed the JAM trinity (Jan Dhan, Aadhaar, Mobile) for targeted transfers.Economic Survey 2014-15
Mapped topper copies
Reviewed public-source references related to this PYQ. Same-syllabus references are labelled separately.
- Aniket Ranjan · AIR 48 · Page 32 ↗Reviewed PYQ reference
- Shakti Dubey · AIR 1 · Page 29 ↗Same syllabus reference
- Aniket Ranjan · AIR 48 · Page 9 ↗Same syllabus reference
- Aniket Ranjan · AIR 48 · Page 7 ↗Same syllabus reference
Links open original public sources. MainsBuddy does not host these answer sheets.
Next: plan for one minute, write it in 9 minutes, then get it checked.