Delivery of subsidies and welfare benefits through the direct benefit transfer (DBT) mechanism fell 5% to Rs 6.6 lakh crore in FY26 from Rs 6.9 lakh crore in FY25.
The DBT spending pattern also reveals a shift in government resource allocation, with a moderation of transfers under some welfare schemes while allocations toward housing and agriculture have risen.
Agri-Support
Fertiliser subsidies increased by 7% to Rs 1.9 lakh crore in FY26 from Rs 1.78 lakh crore in FY25, underscoring the government’s emphasis on supporting the farm sector amid elevated global input costs.
Food subsidy transfers through the Public Distribution System (PDS), however, declined to RS 1.5 lakh crore from Rs 1.63 lakh crore, indicating some rationalisation even as it remains one of the largest components of DBT.
Meanwhile, expenditure under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) remained largely stable at Rs 64,253 crore compared with Rs 64,688 crore in FY25, pointing to continued but calibrated support for rural employment.
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Among the most notable reductions was in PAHAL, the LPG subsidy programme, where spending dropped to Rs 12,430 crore from Rs 18,068 crore in FY25, continuing a gradual tapering as subsidy burdens ease. However, the outgo on LPG is likely to spike in FY27 due to a surge in energy prices after the West Asia conflict.
Allocations under the National Social Assistance Programme (NSAP) nearly halved to Rs 3,181 crore from Rs 6,617 crore, while scholarship schemes recorded one of the sharpest cuts, falling to Rs 4,486 crore from Rs 10,795 crore. These reductions suggest either tighter targeting or a broader shift in how support is delivered.
In contrast, rural housing emerged as a key focus area. Spending under the Pradhan Mantri Awas Yojana–Gramin (PMAY-G) rose to Rs 38,932 crore in FY26 from Rs 35,024 crore a year ago, reflecting a continued push to strengthen rural infrastructure.
Transfers under the “Others” category also fell, to Rs 1.92 lakh crore from Rs 2.14 lakh crore, contributing to the overall decline in DBT outgo.
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Rationalization and Savings
According to the latest government data, DBT has helped plug leakages amounting to Rs 4.31 lakh crore cumulatively since FY15.
The DBT-induced savings provided government finance managers with significant headroom to improve spending quality and offer additional welfare benefits to eligible beneficiaries, without overly constraining the exchequer.
There are around 1.97 billion beneficiaries in the current financial year across schemes with many benefitting from multiple schemes. There are about 44 in-kind schemes and 284 cash-based schemes.
TOPICSdirect benefits transferThis article was first uploaded on April five, twenty twenty-six, at twenty-eight minutes past five in the evening.