Post the IT boom in the global arena, in the last 15 years, India pushed its limits to stay ahead in the race of digitalization. Although the nation lacked the critical infrastructure to even think of digitalization, the remarkable efforts of the government’s policies made it possible. In 2011, India had about 121 million internet users, with over 75% accessing it from urban cities. By 2026, India's internet landscape had transformed dramatically, reaching over 1.03 billion users, with nearly 57% of active users coming from rural areas. This shift shows the rapidity in the expansion rate of mobile networks and high-speed internet connections. Government used it as an opportunity to go for digitalization of all possible services and processes. The major agenda behind the digitalization of government services was the elimination of middlemen, intermediaries, and recurring bureaucratic hurdles, apparently tackling the petty corruption happening at such levels. In this article, we would do the scrutiny of the government’s claims of curbing corruption by analyzing the impact created through digitalization.
In 1985, former Prime Minister Rajiv Gandhi famously stated that for every rupee spent by the government on welfare schemes, only 15 paise reached the intended beneficiaries. He made this remark publicly highlighting the severe administrative leakages and corruption. However, this statement is often used as rhetoric by rival parties. But the government understood the reality and tried to repair the leakages from the very structural level. The government attempted to improve the mechanism of DBT (Direct Benefit Transfer), which is also the government’s strongest claim regarding digitalization and anti-corruption. DBT transfers increased from around ₹7000 crore in 2014 to over ₹7.5 lakh crore annually by FY 2025-26. According to a new quantitative assessment by the BlueKraft Digital Foundation, India’s Direct Benefit Transfer (DBT) system has helped the country achieve cumulative savings of ₹3.48 lakh crore by plugging leakages in welfare delivery. The report also finds that subsidy allocations have been halved from 16 percent to 9 percent of total government expenditure since the implementation of DBT, reflecting a major improvement in the efficiency of public spending. Thus, for every rupee that earlier went through multiple hurdles, DBT increasingly ensured that the rupee reached the beneficiary directly.
Nevertheless, it was not easy to implement the system of DBT, as India lacked the necessary infrastructure for this mechanism. In 2011, approximately 35.2% of the Indian adult population had a bank account, according to the World Bank Global Findex Database. This corresponded to around 433 million individuals, as India's overall adult population stood at roughly 1.23 billion by the 2011 Census. The current bank account ownership rate in India stands at 89% of the adult population. This marks a massive increase from 2011. This could be possible due to the policy of JAM Trinity, which stands for Jan Dhan bank accounts, Aadhaar unique ID numbers, and mobile phones. This framework has enabled targeted and transparent transfers on a massive scale. Under PM Jan Dhan Yojana (PMJDY), a revolutionary drive for financial inclusion was introduced. Over 55 crore Jan Dhan bank accounts were opened with deposits exceeding ₹2.5 lakh crore. Also, more than 55% of account holders are women, so it contributed to women’s empowerment as well. So, this scheme brought the unbanked population into the formal financial system by providing zero-balance accounts to citizens, promoting secure savings and access to credit. Aadhaar unique ID numbers, the world’s largest biometric identification system, provide a unique identity, ensuring welfare schemes and subsidies reach the right beneficiaries. Finally, the mobile connectivity acted as the technological backbone linking the citizen’s bank account and Aadhaar identity in real-time, allowing them to authenticate and receive digital payments directly.
Hence, with this mechanism, the intermediaries were largely removed to create any opportunity for petty corruption. Also, about 10 crore fake beneficiaries have been weeded out from the system, which has helped in preventing ₹ 2.75 lakh crore from going into wrong hands. Further, with this mechanism already built, the platform was set for India’s most successful digital public infrastructure, known as UPI (Unified Payments Interface). In FY 2016-17, there were about 2 crore digital transactions happening, and by FY 2025-26, the numbers went up like a tracer bullet to 24,162 crores; that is an increase of nearly 12,000 times. It is amazing to believe that a nation with just 35% of the population having bank accounts in 2011 is platforming nearly 50% of the global real-time digital payment transactions in 2026. Through the continued expansion of digital payment solutions and initiatives like UPI, India is setting new benchmarks for economic empowerment and financial transparency. The financial transparency introduced with the help of UPI by reduced cash handling alone had a major impact upon petty corruption. It brought money mobilization under the radar of the government and helped in creating transaction trails to a large extent. Digital payments reduced opportunities for bribery in small transactions and also made tax evasion a little more difficult. Hitherto, the overall changes brought by the collective efforts of JAM and UPI have a solid anti-corruption significance.
Thereafter, several other initiatives as well were taken to reduce the opportunity of corruption. One such initiative is Government e-Marketplace (GeM); public procurement is considered to be one of the most corruption-prone sectors, and GeM digitized its mechanisms, such as tendering, price discovery, vendor registration, procurement records, etc. It has brought significant price savings and transparency to the system. The DBT was the structural revolution that transformed every sector of their financial management. Like millions of duplicate or fake LPG connections were identified and removed through Aadhaar-linked subsidy systems, also in MGNREGA (now VB-G RAM G), digital payments significantly reduced fake workers, ghost beneficiaries, and local-level leakages.
Well, one thing that could be easily inferred from our discussion so far is that a significant blow to the intermediary leakages and petty corruption has been given by the digitalization efforts of the government. But that is not the sole reality, so let’s come to the other side of the picture. With the help of DBT, the benefits of the government schemes directly reached the beneficiary, and it is assumed that no leakage has occurred. But at the local level, especially in rural areas, many such instances have been reported where the beneficiary approving authority (mostly Gram Pradhan) has conditioned taking a share in the benefit received in exchange for the approval of the scheme. In schemes like PM Awas Yojana, where a certain amount is deposited by the government for the housing of the unsheltered households, this kind of corruption has been recurrent. Also, people with well-built homes have been approved as the beneficiary by local officials in exchange for the remuneration. There are many loopholes in the system that are still present, creating opportunities for corruption. Like the continued benefits in some services even after the death of the beneficiary shows the inefficient framework of the system, as there is still no universal automatic deletion mechanism from all the government benefits in one go after the death of a person. Technology has definitely played a massive role in tackling the corruption, but it may cause some inconveniences if poorly implemented at the ground level. As Aadhaar authentication failures have occasionally resulted in delayed welfare payments, denial of rations, or even exclusion of genuine beneficiaries. Digitalization has also created a new playing field for fraudsters and scammers. UPI scams, OTP fraud, and other cybercrimes have surged in recent years.
Henceforth, despite the massive digitalization, corruption has still not been fully eliminated; instead, it has just changed its form in many cases. So, the absolute blockage of leakages and removal of corruption can be said to be a bit of an exaggerated claim; however, undeniably, digitalization has damaged the structural model of corruption to a large extent.
— Saurabh Srivastava