New Delhi, Dec 22 (NationPress) A recent report reveals that India's states implementing Aadhaar-linked digital payment systems and biometric verification have achieved a significant reduction in welfare leakage by around 12.7 percent. This achievement sets a global standard for integrity in public welfare.

The analysis from the Boston Consulting Group (BCG) highlights that governments across the globe allocate more than $21 trillion in public payments to citizens each year, of which approximately $3 trillion is lost due to issues such as fraud, errors, or inefficiencies.

In India, the use of biometric authentication and direct digital transfers has enhanced the delivery of essential services like food rations, social pensions, LPG subsidies, fertilizer assistance, and rural wages, effectively minimizing the need for intermediaries and decreasing administrative expenses.

According to estimates from the World Bank, India could potentially save up to $10 billion annually by eradicating fraudulent claims and preventing duplicate identities through the implementation of Aadhaar-enabled systems.

The Aadhaar system has contributed to reducing administrative costs and curtailing leakages within some of the world's largest social subsidy initiatives. Case studies from states like Andhra Pradesh, Jharkhand, and Rajasthan demonstrate improved service delivery without excluding legitimate beneficiaries.

Mario Gonsalves, the India Leader of BCG’s Public Sector Practice, remarked, "India’s swift embrace of digital infrastructure in public service delivery and payments enables it to integrate integrity from the ground up. Solutions enhanced by AI can drastically diminish leakage in welfare initiatives, bolster public trust, and ensure that governmental spending maximizes its positive impact on citizens."

Under the PM Kisan Samman Nidhi (PM-KISAN) Yojana, the Indian government has already transferred over Rs 3.7 lakh crore directly into the accounts of more than 11 crore farmer families nationwide.

The integration of the Public Financial Management System (PFMS) with Digital Payments and Direct Benefit Transfer (DBT) mechanisms guarantees that subsidies and welfare benefits are delivered directly to the intended recipients, thereby minimizing loss and duplication.

Moreover, the advent of digital tools for revenue generation, including e-invoicing, e-way bills, and faceless assessments, has broadened the tax base while simultaneously reducing evasion. This comprehensive approach has strengthened revenue streams and improved fiscal health without necessitating an increase in tax rates.