Nagpur: India’s flagship Direct Benefit Transfer (DBT) system, designed to ensure efficient and transparent delivery of welfare benefits, is facing serious operational shortcomings. The Comptroller and Auditor General of India (CAG), Sanjay Murthy, has flagged that thousands of crores of rupees are being transferred to beneficiary accounts without adequate verification and mandatory checks, raising concerns over data integrity and fiscal accountability.
Addressing the inaugural batch of probationers of the Indian Revenue Service (IRS) at the National Academy of Direct Taxes (NADT) in Nagpur, the CAG said the DBT framework continues to suffer from weak data integration, poor cross-verification, and inadequate duplication controls, despite being projected as a technology-driven reform.
‘One Ministry, Multiple Databases’
Murthy pointed out that the problem lies not only in technology gaps but also in institutional functioning. “The level of siloed working within government departments is such that even joint secretaries within the same ministry do not refer to a common beneficiary database,” he said. This lack of coordination, he noted, severely compromises the effectiveness of checks meant to prevent duplication and ineligible payouts.
While the government frequently highlights the Jan Dhan–Aadhaar–Mobile (JAM) trinity as the backbone of DBT reforms, Murthy said the actual maturity of databases and the quality of reports generated from them remain far below expectations.
Aadhaar-Based Schemes Not Immune to Duplication
The CAG clarified that even schemes labelled as Aadhaar-based are not fully insulated from duplication and misuse. According to him, the de-duplication and cross-database verification mechanisms mandated under the DBT Mission are often either weakly implemented or entirely absent.
As a result, large volumes of public funds continue to flow into welfare schemes without basic validation of beneficiary identity, eligibility or duplication, exposing the system to leakages and inefficiencies. While he did not allege deliberate wrongdoing, Murthy stressed that minimum standards of accuracy and accountability in public expenditure are non-negotiable.
‘India Cannot Follow a Uniform Yardstick’
Taking a pragmatic view, the CAG acknowledged that India’s scale and diversity make uniform implementation of technology-driven systems challenging. “India is a vast country, and we cannot apply the same yardstick everywhere,” he said.
Murthy noted that southern states have gained a technological head start, resulting in more mature datasets and stronger audit outcomes. In contrast, several other states are still operating with fragmented or underdeveloped databases, weakening oversight and monitoring of DBT-linked schemes.
Technology Transforming Audit Processes
Despite the gaps, the CAG highlighted how technology has significantly improved audit efficiency. The use of digital tools has reduced audit timelines sharply, allowing social sector audits to be completed within 45 days, compared to much longer cycles earlier.
He added that audit capabilities have expanded to the extent that up to seven government schemes can now be audited simultaneously, enhancing coverage and depth. As an external auditor, the CAG’s office can access and correlate datasets across schemes, making it easier to detect inconsistencies and irregularities.
Murthy urged young IRS officers to adopt a data-driven approach, noting that collaboration between tax authorities and audit institutions could strengthen scrutiny across both revenue and welfare systems.
He pointed out that databases maintained by agencies such as the Ministry of Road Transport and Highways, the Goods and Services Tax Network (GSTN), and state-level Integrated Financial Management Systems (IFMS) are rich sources of information. Better utilisation and interlinking of these datasets, he said, could substantially improve transparency and control over government spending.
Policy experts view the CAG’s remarks as a clear warning to the government. While DBT has helped reduce intermediaries and curb traditional leakages, weak data quality, poor inter-departmental coordination, and inadequate real-time verification threaten to erode trust in the system.
Experts argue that for DBT to remain credible and effective in the long run, the government must urgently focus on robust data-sharing frameworks, real-time validation mechanisms, and a stricter audit architecture.
