The Three-Cent Government Hour

A small number in a payments-data paper has been bothering me. Among firms most exposed to generative AI, every $1 fall in spending on online labour marketplaces by the third quarter of 2025 was matched by roughly three cents of added AI model spending. Three cents where a dollar used to sit. That is not a productivity nudge. It is a repricing of a whole category of work.

What the ratio actually says

The number comes from a Ramp analysis picked up in commentary on US federal AI policy. The exposed firms were not abandoning the work. They were buying the same first-pass output — drafts, summaries, light code, document review — at a fraction of the prior price. A slice of knowledge work has moved from a labour line item to a software line item, with the ratio between the two collapsing by more than an order of magnitude.

For private firms, this plays out through hiring and margins. For governments, it plays out through almost everything: workforce composition, training pipelines, procurement rules, and the implicit deal that lets young officers grow into senior ones.

Why tax administrations sit in the bullseye

Walk through any direct-tax office and ask what the work actually is. Reading. Drafting. Summarising. Comparing one provision against another. Translating dense statute into plainer language. Spotting the inconsistencies between a return, a third-party report and a bank statement. Almost the entire stack is language-heavy. That is exactly where the three-cent ratio bites hardest.

I have watched this from the inside. Mapping an old direct-tax statute against a new one — tracking which old section migrates where, what is dropped, what is reorganised — is genuinely difficult professional work. A few years ago that effort would consume dozens of officers for months. A current-generation model, given the right corpus and a careful prompt, will now produce a competent first draft of much of it in an afternoon. Not the final word. But a credible first pass.

The same is true of taxpayer-facing communication. Building an assistant that can field lakhs of routine questions on a new law — what the slabs are, how to elect a regime, what to fill where — was, until recently, a serious capital and talent project. Today the floor for that capability has fallen sharply. The hard part is no longer building the bot. The hard part is governance: what it is allowed to say, how its mistakes are caught, how a taxpayer appeals an answer that turned out to be wrong.

The junior officer problem

A Stanford working paper this year found a 16 per cent relative employment decline for workers aged 22 to 25 in the occupations most exposed to generative AI. Read that and a managerial instinct should fire. In any large department, the junior cadre is not just there to do work. It is there to learn. The years spent reading scrutiny files, drafting orders, sitting through hearings — those years are how a tax officer becomes a tax officer.

If the model does the first draft, what does the junior do? The wrong answer is: nothing, until they are senior enough to “supervise” the model. A supervisor who has never written the draft cannot meaningfully review one. Within a decade we would be running an administration whose middle ranks know how to prompt AI for a note but cannot tell when the note is quietly wrong on a point of law.

What the junior role should become

I think the redesign is closer to this. The junior officer is no longer the drafter. They are the evaluator, the contester, the case-builder. From day one they are taught to interrogate a machine-generated draft: where is the citation, is the authority current, does the inference survive cross-examination by a contrary view. They are taught to construct the hard cases the model gets wrong, and to document them. They become the institution’s quality control function rather than its typing pool. That is more demanding work, not less. It suits the calibre of people the service actually recruits.

A proposal worth piloting

If a tax administration wants a concrete way in, here is one. Pick a single, well-bounded workflow — say, drafting routine rectification orders, or first-level responses to grievance petitions. Build a model-assisted pipeline with three deliberate seams: a machine first draft, a structured human evaluation against a checklist, and a logged audit trail of every override. Track three numbers — time saved per case, override rate, and downstream litigation outcomes for the cases that went out. Run it for a year. Publish the numbers.

This is unfashionable advice in a moment that prefers headline pilots and grand strategies. The three-cent ratio is not going to wait for a strategy document. It is already changing what a dollar of knowledge work buys in the market. A serious department asks what that means for its own internal economics, builds the governance to capture the gain safely, and quietly redesigns its junior roles before the redesign happens to it.

The departments that get this right will not be the ones that bought the most expensive tools. They will be the ones whose officers learned, early, to argue with a machine and win.

After Aadhaar, the Productivity Test

On 28 April 2026, NITI Aayog and the Frontier Technology Hub released a roadmap called DPI@2047. The Chief Economic Adviser described India's next phase of digital public infrastructure as a total factor productivity engine. That phrase is doing more work than it looks. It marks the end of one era and the beginning of a harder one.

Reach was the easy part

The first decade of DPI was a reach problem. Could we give 1.4 billion people a verifiable identity? Could we route real-time payments at population scale? Could we plug welfare into a single pipe? JAM, UPI, DigiLocker and GeM answered yes. DPI@2047 quietly concedes that the welfare-delivery question is settled, and sets a different one. The new task is not to reach the citizen; it is to lift what the citizen, the small firm and the small farm can actually produce.

That is a different test, and most departments are not yet measuring themselves against it. The roadmap proposes eight sectoral transformations across MSMEs, agriculture, education, health, credit, energy and social protection, with a state-led, district-executed model and pilots from 2026-27. Notice the language: district-executed. The unit of accountability is shifting downwards. Productivity, unlike inclusion, cannot be claimed in a press release; it has to show up in somebody's actual output.

Why most departments will misread this

The instinctive reading of DPI 2.0 inside government will be: more APIs, more dashboards, more apps. That misreads the brief.

Phase one of DPI worked because it disentangled the rails, identity, payments and data, from the application layer. Phase two is being asked to do something subtler. It must disentangle existing work from existing process. A welfare benefit can move through a new pipe without changing what the benefit is. Productivity gains demand the opposite. The pipe is uninteresting; what changes is the work itself. Deloitte's Government Trends 2026 puts it crisply: the biggest gains come not from automating old processes but from redesigning the work itself. A UK trial of over 20,000 civil servants using generative AI for three months saved an average of 26 minutes a day per person, nearly two working weeks a year. That is not because the AI replaced anybody; it is because the work was finally allowed to be done differently.

Inside Indian government, I have watched well-meaning officers turn a transformative tool into a faster version of the form it was meant to replace. The form persists, the discretion persists, the file persists. Faster, but unchanged. DPI 2.0 will succeed or fail on whether departments are willing to give that comfort up.

Three moves a department should make immediately

Stop digitising forms; redesign the file. The unit of bureaucratic work in India is the file. Every project I have seen that put a digital wrapper around an unchanged file reproduced the same delays in colour. Pick three high-volume work-streams, write down what an ideal file looks like with AI-assisted drafting embedded in it, and re-engineer backwards. The form is downstream; the file is upstream.

Build agents that draft, not bots that retrieve. Most public-sector AI in India today is a chatbot that finds a circular. That was the right starting point. It is now the ceiling. The gain lies in agents that draft an order, prepare a notice, summarise a representation, and present a ready-to-sign output. The officer reviews and decides; the typing is gone. We are using a five-times leverage tool as a 1.2-times search tool, and calling it transformation.

Measure officer-minutes, not transactions. If DPI 2.0 is about productivity, the metric must be productivity. Most dashboards still count transactions: files moved, returns filed, calls answered. None of that tells you whether the work got lighter. The metric that should matter, and that nobody is asked to report, is officer-minutes saved per case. A department that reports this number will, within two quarters, look very different from one that does not.

The harder test is institutional will

The CEA said something else at the launch that has not been quoted enough: India has strong design capabilities, but success will depend on sustained institutional will to move from strategy to execution. That is the polite version of the real problem. Indian bureaucracy is excellent at announcing platforms and indifferent at reorganising work around them. DPI 1.0 succeeded partly because it was built outside the line department, on rails the rest of government had to either ride or be left behind by. DPI 2.0 is being handed to the line departments themselves.

So the productivity test is, in the end, a leadership test. Which Secretaries will decide that their teams write fewer pages, sign fewer files and answer fewer queries by the end of next year? Those are the departments where DPI 2.0 will arrive. The rest will get a new portal.

अरमानों की कोई हद नहीं

हज़ारों ख्वाहिशें ऐसी कि हर ख्वाहिश पे दम निकले 

बहुत निकले मेरे अरमान, लेकिन फिर भी कम निकले

— मिर्ज़ा ग़ालिब

पहला मिसरा —

"हज़ारों ख्वाहिशें ऐसी कि हर ख्वाहिश पे दम निकले"

मेरे मन में हज़ारों चाहतें हैं — और हर चाहत इतनी गहरी है, इतनी तीव्र है, कि उसके लिए जान दे दूँ। "दम निकले" यानी — साँस निकल जाए। प्राण निकल जाएँ। यानी हर एक ख्वाहिश जानलेवा हद तक ज़रूरी है।

दूसरा मिसरा —

"बहुत निकले मेरे अरमान, लेकिन फिर भी कम निकले"

और जब वो चाहतें पूरी हुईं — तो हुईं भी बहुत। ज़िंदगी ने दिया भी। लेकिन फिर भी — कम लगा। तृप्ति नहीं आई। मन और माँगता रहा।

ग़ालिब यहाँ इंसानी मन की एक सच्चाई कह रहे हैं — कि हम जितना पाते हैं, उससे ज़्यादा चाहते हैं। पाना और चाहना — दोनों साथ चलते हैं, कभी बराबर नहीं होते।

घर का रास्ता

रात भर का मेहमान हूँ, ऐ चाँद जानता हूँ मैं 

एक उम्र से हूँ बाहर, घर का रास्ता जानता हूँ मैं

— गुलज़ार

〰〰〰〰〰〰〰〰〰〰

Salem की आख़िरी रात - थोड़ी देर और, फिर वो रास्ता जो हमेशा याद रहता है।

Jo Tudh Bhaavai Saa-ee Bhalee Kaar: The Leadership Verse Hidden in Japji Sahib

ਵਾਹਿਗੁਰੂ ਜੀ ਕਾ ਖ਼ਾਲਸਾ, ਵਾਹਿਗੁਰੂ ਜੀ ਕੀ ਫ਼ਤਿਹ।

Some verses of Gurbani carry you quietly for years before you notice they have been doing the work. This is one of them. Two lines from Japji Sahib that I find myself returning to on difficult days, in difficult meetings, and in quiet evenings with my children.

The Shabad

Gurmukhi

ਜੋ ਤੁਧੁ ਭਾਵੈ ਸਾਈ ਭਲੀ ਕਾਰ ॥
ਤੂ ਸਦਾ ਸਲਾਮਤਿ ਨਿਰੰਕਾਰ ॥

Hindi

जो तुझे अच्छा लगे, वही कार्य भला है।
तू सदा सलामत है, हे निरंकार।

English Transliteration

Jo tudh bhaavai saa-ee bhalee kaar.
Too sadaa salaamat Nirankaar.

Source: Ang 3, Sri Guru Granth Sahib Ji. Japji Sahib, Pauri 16. Composed by Guru Nanak Dev Ji.

Understanding the Verse

Word by word: whatever pleases You, that alone is the good work. You, Formless One, are forever whole.

The word salaamat is worth pausing on. It is an Arabic-rooted word, the same root as Islam and salaam, meaning peace, wholeness, being untouched by harm. Guru Nanak Dev Ji, writing in the heart of Punjab's Hindu-Muslim interweave, deliberately reaches into both vocabularies. This is the Sikh instinct from its first breath: truth borrows whatever word speaks truest.

This tuk is the pinnacle of one of Sikhi's most difficult teachings: Bhana Manana, acceptance of the Divine Will not with gritted teeth but with the recognition that what unfolds in Hukam is already beautiful work.

Notice the breathtaking move the Guru makes. He does not say "whatever happens is fine"; that would be fatalism. He does not say "accept what you cannot change"; that would be Stoicism. He says something far more radical: whatever pleases the Formless One is the good work. The doer is the Divine. The good is defined by the Divine's pleasure. Our task is to align with that current, not to judge it.

And then, in a single closing line, he anchors the whole teaching. Too sadaa salaamat Nirankaar. You, Formless One, are forever whole. Whatever the waves on the surface, the ocean is untouched.

This verse became the spiritual steel of the Sikh tradition. When Guru Tegh Bahadur Ji walked to his martyrdom in Chandni Chowk in 1675, he walked in bhana. When Mata Gujri Ji received the news of her grandsons' bricking alive at Sirhind, she responded in bhana. This is not passivity. It is the fiercest form of agency, because it frees the soul from the tyranny of outcomes.

How This Lands in a Working Life

You walk into a meeting having prepared a careful note, a careful recommendation. The decision goes the other way. Or a posting you wanted does not come. Or a file you championed gets stuck. The mind begins its familiar loop: I should have, they should have, if only.

This verse is the circuit breaker. Jo tudh bhaavai saa-ee bhalee kaar. You did your karam with full honesty. The rest is not yours to carry. The Hukam has moved. And the One who moves it is sadaa salaamat, forever whole, forever unshaken. So why must you be?

A harder application: ambition. The verse does not ask you to kill ambition; Sikhi never does. It asks you to hold ambition with open palms. Do the work with your whole heart. But when the outcome lands, greet it with bhalee kaar. This is the secret of leaders who do not exhaust themselves. The work is theirs; the fruit is the Guru's.

Wisdom Across Traditions

Krishna's teaching to Arjuna on the battlefield in the Bhagavad Gita, Karmanye vadhikaraste, ma phaleshu kadachana (you have the right to action alone, never to its fruits), is a sibling of this verse. The Gita leaves the fruit undefined. Guru Nanak Dev Ji names it: the fruit pleasing to the Divine is itself bhalee kaar.

The Sufi concept of tawakkul (trust in Allah) and rida (contentment with Divine decree) maps almost exactly onto bhana. Rumi writes that the reed flute cries because it has been cut from the reed bed, yet its cry becomes music that pleases the Beloved. The cutting was bhalee kaar. That the Guru uses the Arabic-rooted salaamat to describe the Formless One is not accident; it is embrace.

A Closing Thought

Hukam is what is. Bhana is how we receive what is. A Sikh who lives in Bhana is unshakeable, not because nothing moves them, but because they have stopped quarrelling with reality.

Two lines, twenty words, one lifetime of practice.

ਵਾਹਿਗੁਰੂ ਜੀ ਕਾ ਖ਼ਾਲਸਾ, ਵਾਹਿਗੁਰੂ ਜੀ ਕੀ ਫ਼ਤਿਹ।

From your desk to the FM - KarSetu

There is a particular kind of satisfaction — quiet, almost private — that comes from watching something you crafted at your own desk travel all the way up and enter the public domain at the highest level. On 20th March 2026, the Hon'ble Finance Minister of India, Smt. Nirmala Sitharaman, released Kar Setu — the eBook and booklet on Interplay and Transition FAQs from the Income Tax Act, 1961 to the Income Tax Act, 2025.

What Kar Setu Is

India is undergoing one of the most significant legislative transitions in its fiscal history. The Income Tax Act, 1961 — a statute that governed the tax lives of every Indian for over six decades — is being replaced by the Income Tax Act, 2025. This is not a cosmetic rewrite. It is a restructuring of 536 sections, affecting over 700 field offices, tens of thousands of tax officers, and millions of taxpayers and practitioners across the country.

The question that every officer in the field, every chartered accountant advising a client, every taxpayer filing a return would inevitably ask is: What changes? What stays? What do I do differently starting April 2026?

Kar Setu was built to answer that question.

The name itself — Kar Setu, a bridge of duty — was chosen deliberately. This is not a commentary or an academic paper. It is a bridge. A structured, FAQ-based guide that maps the interplay between the old Act and the new, so that the transition is navigable rather than bewildering.

The Four Months Behind It

What the public sees today is a finished product — clean, structured, authoritative. What they don't see is the four months that preceded it.

Sixteen sub-committees were constituted to cover every major area of the Act. Each committee comprised officers who live and breathe these provisions daily — assessment, appeals, penalties, TDS, international taxation, search and seizure, and more. The coordination happened out of the Directorate of Organisation and Management Services (DOMS), CBDT, where I serve as Member Secretary to the Guidance Note Committee for the ITA 2025 implementation.

There were drafts. Many drafts. There were rounds of review where a single FAQ would be debated, reworded, cross-referenced, and debated again. There were late-night iterations where you are staring at Section 247 of the new Act and tracing its lineage back to Section 143(3) of the 1961 Act, making sure the transition guidance is precise enough that a young ITO in a mofussil town can rely on it.

This is the unglamorous work of governance. No stage, no spotlight. Just a desk, a screen, and the knowledge that if you get this wrong, the confusion will cascade across the entire tax ecosystem.

Why This Matters Beyond Tax

I have spent fifteen years in the Indian Revenue Service. I have done transfer pricing investigations, ITAT litigation, international tax advisory, and policy work. I have studied at Columbia and Harvard, advised at the UN, and consulted for the G20. But I will say this plainly: there is something uniquely grounding about building a document that will be used by an Assessing Officer in Dharwad and a Senior Partner at a Big Four firm in Mumbai on the same day, for the same purpose.

Kar Setu is a leveller. It doesn't distinguish between the officer who needs it to process a case and the practitioner who needs it to advise a client. It serves both. That is what public goods are supposed to do.

In an age where we talk endlessly about AI in governance, digital transformation, and technology-led reform, it is worth remembering that sometimes the most impactful thing a government can produce is a well-structured document that answers the right questions clearly. Not an app. Not a dashboard. A document — researched, debated, refined, and released.

The Moment

When the Finance Minister releases something you have been working on for months — something that started as a working file on your desktop, went through committee after committee, was revised at 11 PM on a Thursday, and finally emerged as a polished eBook — there is a moment. It is not dramatic. It is not cinematic. But it is deeply, quietly, satisfying.

You don't need anyone to tell you the work mattered. You know. Because you watched it travel from your desk to the hands of the person who stewards this country's fiscal policy. And now it is in the public domain, serving the people it was always meant to serve.

Kar Setu is live. The bridge is built.

Election Duty in Tamil Nadu

The alarm goes off at 4:30 AM in Girnar Guest House in Kaushambi. It is the 18th of March 2026. I have packed the night before. Three copies of my appointment letter. Six passport-size photographs. A hardbound diary. Blue pen, black pen, red pen. The red one, I suspect, will see the most use.

On my laptop, my phone, and a pen drive, there is a PDF I have been reading for two days. The Compendium of Instructions on Election Expenditure Monitoring, December 2024 edition. Five hundred and some pages. It is going to be my reference manual for the next forty-five days.

I have been following money trail in Income Tax. Today, I am going to follow money in a different place.

The Election Commission of India has appointed me as Expenditure Observer for the Tamil Nadu Legislative Assembly Elections, 2026. My constituency is 86-Edappadi, Salem District. 

My job is straightforward. Every candidate contesting this seat can spend a maximum of Rs. 40 lakh under Rule 90 of the Conduct of Election Rules, 1961. I am here to make sure that limit is respected. And to catch the spending that candidates would rather not declare: the cash, the liquor, the freebies, the vehicles that never make it into any register.

Different domain. Same discipline. Follow the money.

The flight leaves Delhi at 7:05 AM. I land in Bangalore by mid-morning and make my way to Salem by a connecting flight. The landscape changes as you cross into Tamil Nadu. The soil turns red. Granite quarries appear on hillsides. Steel plants. Sago factories. Roadside stalls selling tender coconut. The signboards switch to Tamil, a script I cannot read.

Salem is bigger and more industrial than I expect. Thirty lakh people live in this district. Eleven Assembly constituencies. One Lok Sabha seat. A steel plant, a river, a busy corporation. This is not a sleepy town. This is a serious place.

A blue-beacon Innova is waiting for me. My Liaison Officer, Thiru. Duraisamy, and my PSO, Thiru. Samuel, are standing beside it. In the grammar of Indian government, a blue-beacon vehicle is a statement. It says: the Election Commission is here. Word travels in a constituency. By evening, people in Edappadi will know that the Expenditure Observer has arrived.

That is by design.

Most people think of elections as rallies and speeches and ballot boxes. They do not think about what runs underneath.

India's election expenditure monitoring system is, quietly, one of the most ambitious real-time financial surveillance operations in any democracy. Flying Squads patrol highways at 3 AM, stopping vehicles and checking for cash. Static Surveillance Teams sit at junctions with cameras and logbooks. Video teams record every rally and public meeting so that someone can later count the chairs, measure the pandal, estimate the cost, and ask: did the candidate report this?

Check posts on every major road. An Election Seizure Management System that logs every seizure of cash, liquor, drugs, or freebies in real time. Shadow registers that track observed expenditure independently of what candidates declare.

And at the centre of this system, an Expenditure Observer in every constituency. 

I meet the police first. The Superintendent of Police, Salem.

We sit across a table and talk about money. Not money in the abstract. Cash movement corridors through the district. Drug transit routes that get repurposed during elections for distributing inducements. Liquor supply chains. The geography of how money and material flow into a constituency when an election is on.

We exchange phone numbers. That is the real deliverable of the meeting.

Then the Collector. District Collector and District Election Officer, Salem. 

She manages eleven constituencies simultaneously. She knows the machinery.

I also meet the Commissioner of Police. That is three institutional meetings in a single afternoon. Three sets of phone numbers saved. Three relationships established.

The foundation is being laid.

Then I leave Salem for Edappadi.

Forty-two kilometres west. The road passes through Tharamangalam. The landscape opens into the kind of small-town Tamil Nadu that runs on agriculture, granite, and local commerce. The Mettur Dam, one of the largest in India, sits at the edge of this constituency.

I arrive in the late evening. The temperature is 36 degrees. My accommodation is an Inspection Bungalow. 

I meet the Assistant Expenditure Observer and the Returning Officer's team. These are the people who will actually run the expenditure monitoring on the ground every day. Block-level officials. Taluk-level officers. People who know every lane in this constituency.

I explain the shadow register. This is the most important tool in my kit. A parallel ledger maintained independently by my team, recording every observed campaign activity and its estimated cost based on the DEO's rate charts. When a candidate declares they spent fifteen lakh and my shadow register shows thirty-five lakh of observed activity, that gap is where the questions begin.

I set up the daily reporting protocol with the AEO. Summary every evening by 8 PM. Seizures reported immediately. No delays. No filtering.

They save my number. I save theirs. And a whatsapp group is created.

Here is what I have learned on Day 1.

The machinery exists. The teams are being assembled. The infrastructure is taking shape. Salem district has a competent Collector, a sharp SP, and a police commissionerate that is engaged. At the constituency level, the AEO and RO team are in place.

Whether the machinery works under pressure is a different question. That is what the next four days are for. I will inspect check posts. I will visit Flying Squads in the field. I will meet State Excise officials. I will walk through the Expenditure Sensitive Pockets identified in this constituency. I will look at registers and formats and verify that the teams are not just formed on paper but actually functioning on the ground.

There is something I keep thinking about.

In tax administration, the stakes are revenue. Important, certainly. A nation runs on what it collects.

In election monitoring, the stakes are the process itself. Every rupee of unaccounted expenditure is a small crack in the integrity of a democratic exercise. Every cash envelope distributed to a voter is an attempt to convert a citizen's choice into a transaction. The expenditure monitoring system exists to hold that line.

I am not being dramatic about this. It is just a fact. The line holds because someone is watching. The observer is not only a checker of registers. The observer is a signal that someone is counting.

A note on language.

I do not speak Tamil. This is, to put it mildly, a limitation when you are posted in Tamil Nadu.

But I have discovered that vanakkam, said with folded hands and a genuine smile, opens every door. That nandri, said often, builds goodwill faster than any official letter. And that sari, meaning OK, meaning understood, meaning let us proceed, is the single most useful word in the working vocabulary of Indian governance.

My Liaison Officer, Thiru. Duraisamy, handles the rest with a patience I find remarkable. The block-level officials speak enough English that we get by. In government, the real language is not Hindi or Tamil or English. It is the language of registers, formats, reports, and deadlines. That language, I speak fluently.

It is late now. The ceiling fan turns. The night outside is warm and full of the sounds of a Tamil Nadu small town: insects, a distant temple speaker, the occasional auto-rickshaw.

I open my diary and write the day's observations. Four meetings. Two cities. One overnight transformation from a tax officer in Delhi to an election observer in a constituency I had never visited before this morning.

I have four more days in this visit. Then back to Delhi for a week. Then back here on the 30th of March when the gazette notification drops. Then continuously from the 5th of April through polling day on the 23rd.

The work has begun.

Vanakkam, Tamil Nadu.