Lower DBT outlays also coincide with reduced budgeted spending on fertilizer and food subsidies, reflecting the government’s broader fiscal consolidation push | Photo Credit: PTI

Direct Benefit Transfers (DBT), which expanded sharply during the pandemic years, have been showing a clear slowdown since FY24. While the value of DBTs till February 12, 2026, amounted to ₹5.44 lakh crore in FY26, the number of transactions stood at just 528 crore. The transactions have nearly halved from 931 crore in FY25.

A steady rise was seen between FY20 and FY23, when DBT outlays nearly doubled from ₹3.81 lakh crore to ₹7.16 lakh crore. Spending flattened in FY24 and FY25 and may be slightly lower in FY26, compared to the previous year. This points to a mix of fiscal tightening and slower implementation of schemes.

Economists attribute the decline primarily to tighter Budget allocations and delays in fund utilisation. “The decline is largely driven by a decline in Budget allocation,” said Prof Anil Sood, Institute for Advanced Studies in Complex Choices (IASCC). He noted that the sharp fall seen in the current fiscal year could partly be corrected as the year progresses, but flagged large sums lying unspent in Single Nodal Agency (SNA) accounts.

“For instance, the ministries of Social Justice and Empowerment and Tribal Affairs together have about ₹4,000 crore parked in these accounts,” Sood said, suggesting that lower on-ground spending reflects not just reduced allocations but also slower release and utilisation of funds.

Space for others

Lower DBT outlays also coincide with reduced budgeted spending on fertilizer and food subsidies, reflecting the government’s broader fiscal consolidation push. While publicly available data does not fully explain scheme-wise cuts, Sood pointed out that the need for food support has not declined, given stagnant real incomes for a large share of the workforce.

A comparison of FY25 and FY26 shows that the slowdown is broad-based. Scholarship transfers fell by nearly 65 per cent, and NSAP (financial assistance to the elderly and PWDs) payments dropped over 62 per cent till the first half of February. PAHAL (LPG) transfers are also likely to be lower this year as the number of Ujwala beneficiaries declines. The other category, which includes smaller welfare and State-specific schemes, has recorded the sharpest contraction in FY26, by almost 50 per cent.  

Even as overall DBT slows, its composition is shifting. In-kind transfers now account for over 61 per cent of DBT in FY26, compared with 37 per cent in FY20. The share of cash transfers has fallen to 38 per cent.

“In-kind schemes are better choices than cash transfers,” Sood said, arguing that they are more likely to meet scheme objectives such as ensuring access to food grains and fertilizers, though effectiveness ultimately depends on implementation.

Overall, the data suggest DBT is not being rolled back, but is losing momentum amid fiscal pressure, implementation bottlenecks and a gradual rebalancing of welfare delivery.

Published on February 13, 2026