Aadhaar-Linked Payments Help Reduce Welfare Leakage by 13%, Says BCG
BCG report finds Aadhaar-linked digital payments have helped India reduce welfare leakage by nearly 13 percent
New Delhi: India has set a global benchmark in public welfare integrity by reducing leakage in its systems by nearly 13 per cent. According to a new report from the Boston Consulting Group (BCG), the country achieved this through major reforms in digital payments. This success shows how using technology can stop money from being lost or stolen before it reaches the people who need it most.
The report, titled “Closing the Trillion-Dollar Gap in Public Payments,” explained that governments across the world give out more than USD 21 trillion every year to help citizens with pensions, healthcare, and basic needs. However, about USD 3 trillion is lost every year because of cheating, mistakes, or slow systems. India is now a leading example of how to fix these problems.
In the Indian context, states that started using Aadhaar-linked digital payments and fingerprint checks have cut down welfare leakage by approximately 12.7 per cent. The report noted that this was done without leaving out the real people who are supposed to get the help. By using these smart systems, India can save up to USD 10 billion every year. These savings come from removing fake names and stopping people from claiming money more than once.
States such as Andhra Pradesh, Jharkhand, and Rajasthan show how these tools deliver help to the very last person. Millions of Indians now receive their food rations, cooking gas subsidies, and work wages much more quickly. These people no longer have to rely on middlemen who often take a portion of the money for themselves.
“With global public payment systems losing up to $3 trillion annually to fraud and error, India has a unique chance to lead the next wave of governance reform. 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 BCG report highlights that India’s digital setup is a model that other countries can copy. It shows that governments can improve how they spend public money without making it harder for citizens to access their benefits.
(ANI)
