States that adopted Aadhaar‑linked digital payments and biometric authentication reduced welfare leakage by approximately 12.7 per cent, setting a benchmark globally in public welfare integrity
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NEW DELHI — States that adopted Aadhaar‑linked digital payments and biometric authentication reduced welfare leakage by approximately 12.7 per cent, setting a benchmark globally in public welfare integrity, a report said on Monday.
The report from Boston Consulting Group (BCG) said that governments worldwide distribute over $21 trillion in public payments to citizens annually, but $3 trillion is lost due to fraud, error, or inefficiency.
In India, biometric authentication and direct digital transfers have strengthened last‑mile delivery of food rations, social pensions, LPG subsidies, fertiliser support and rural employment wages, reducing reliance on intermediaries and lowering administrative costs, the report said.
World Bank estimates suggest India could save up to $10 billion annually by eliminating fraudulent claims, duplicate identities and intermediaries through Aadhaar‑enabled systems, it noted.
Aadhaar has lowered administrative costs and reduced leakages across some of the world’s largest social subsidy programmes. Evidence from Andhra Pradesh, Jharkhand and Rajasthan showed improved delivery without excluding genuine beneficiaries, it said.
"India’s rapid adoption of digital infrastructure, especially in public service delivery and payments, allows it to embed integrity by design. AI-enabled integrity solutions can significantly reduce leakage in welfare programs, strengthen trust in institutions, and ensure that public spending delivers maximum impact for citizens,” said Mario Gonsalves, India Leader, Public Sector Practice, BCG.
The Centre has disbursed more than INR 3.7 lakh crore directly into the bank accounts of over 11 crore farmer families in the country under the PM Kisan Samman Nidhi (PM-KISAN) Yojana.
The integration of PFMS with the Digital Payments and Direct Benefit Transfer (DBT) has ensured that subsidies and welfare benefits reach directly to the population thereby minimising leakages and duplication.
These, combined with the digital tools for revenue generation such as e-invoicing, e-way bills and faceless assessments, have widened the tax base and reduced evasion. These measures combined have strengthened revenue flows and helped improve fiscal balance without increasing tax rates.