Comptroller and auditor general of India (CAG) Sanjay Murthy has flagged serious structural weaknesses in the government’s direct benefit transfer (DBT) framework, warning that thousands of crores of rupees are flowing into beneficiary accounts without mandatory checks due to poor data integration and siloed functioning across departments.
Addressing the inaugural batch of Indian Revenue Service (IRS) officers at the National Academy of Direct Taxes in Nagpur, Mr Murthy says there are 'significant gaps' in preventing duplication and in cross-verification of beneficiary data, according to a
report in The Times of India (ToI).
“Government departments are working in silos to such an extent that different joint secretaries in a single department do not refer to the same database,” Mr Murthy says, underscoring deep coordination failures even within individual ministries.
While India frequently highlights the Jan Dhan–Aadhaar–mobile (JAM) trinity as the backbone of financial inclusion, Mr Murthy pointed out that database maturity and interoperability remain far from adequate.
“We talk about Jan Dhan, Aadhaar and mobile phone-linked database connectivity. Still, if you look at the maturity level at which databases are deployed, especially from the reports we generate, there is a huge gap,” he was quoted in the ToI report.
CAG added that although schemes are projected as Aadhaar-based, the level of de-duplication and cross-database verification mandated under the DBT mission is often missing. “There are thousands of crores going into the system without basic checks in financial inclusion schemes,” he cautioned.
Speaking with ToI, Mr Murthy says India’s size and diversity meant that a uniform benchmark could not be applied across states.
“India is a vast country and we cannot have the same yardstick everywhere. Southern states have a head start in the application of technology, leading to the availability of more mature data for audit,” he told the newspaper.
However, he stressed that the absence of deliberate intent did not excuse weak implementation. Basic checks & balances must be ensured while rolling out government schemes, as accuracy in beneficiary identification and payments is critical, he added.
CAG’s concerns about DBT vulnerabilities mirror earlier audit findings that revealed payments to ineligible or even deceased beneficiaries. A
Moneylife report from August 2023 on a CAG performance audit of the national social assistance programme (NSAP) found that pensions worth ₹2 crore were paid to 2,103 beneficiaries across 26 states and Union Territories (UTs) even after their death.
According to the audit covering FY17-18 to FY20-21, pension payments continued, despite clear NSAP guidelines mandating the immediate discontinuation of payments in cases of death, migration, or loss of eligibility. In a beneficiary survey, payments were found to have continued after death in 290 out of 8,461 cases examined, indicating serious lapses in reporting and data updating, according to the Moneylife report.
The same audit also flagged diversion of funds, noting that ₹2.83 crore earmarked for information, education and communication (IEC) activities under NSAP was used for publicity and campaigning of other schemes. In addition, ₹57.45 crore was diverted in six states and UTs for purposes unrelated to NSAP, says the Moneylife report.
Mr Murthy told IRS probationers that technology has significantly reduced audit timelines, allowing completion of social sector audits within about 45 days. He says the CAG can now audit seven schemes simultaneously and correlate data across multiple platforms.
Databases maintained by agencies such as the ministry of road transport and highways, the goods and services tax (GST) network and state-level integrated financial management systems could be a 'mine of information' if properly leveraged, he added.
However, the latest remarks underline a persistent paradox: while the government has invested heavily in digital delivery of welfare, weak integration, inadequate de-duplication and siloed data governance continue to expose public funds to leakage, duplication and misuse, raising questions about the robustness of India’s flagship DBT architecture, according to the ToI report and earlier CAG findings highlighted by Moneylife.
The availablity of technology and outsourcing of jobs to reduce responsibility and bring down wages resulted in laxity in checks and counter checks and efficient regulation and supervision.
The impact is evident across institutions. When employees are not on own payrolls, accountability is the first casualty.