In a previous article which explained Kerala’s PM-SHRI controversy and the trap of economic centralisation, we asked how the Public Financial Management System under a Single Nodal Agency – PFMS-SNA – works and how it undermines constitutional federalism. But the deeper question is ‘why’ – for what purpose are all these technological tools being built? What political logic makes these comprehensive data systems necessary?

The answer to this question cannot be found through mere technical analysis. Only from the perspective of critical theory and the political economy of technology can the inner logic of the Indian state’s tendencies be understood. Aadhaar, Agristack, PFMS, Aarogya Setu, The Academic Bank of Credits (ABC), Automated Permanent Academic Account Registry (APAAR) – all these are not just technological solutions. They are material realisations of a particular kind of political power and the basic elements of data authoritarianism.

A deepening crisis and the response to it

India's sweeping data centralisation since 2014 is no accident; it is the authoritarian expression of a deepening capitalist crisis, transforming the state into a repressive apparatus to ensure capital's survival.

This repressive apparatus is the direct result of an internal crisis: the collapse of the Indian economy, fuelled by unbridled profiteering, has led to a surge in mass protests. As the current regime struggles to contain the social discontent – spurred by peasant uprisings and devastating unemployment caused by the collapse of the MSME (small and medium enterprises) sector, a ruin significantly accelerated by the disastrous 2016 demonetisation move – it aligns with George Dimitrov's theory. The theory has it that it becomes necessary for finance capital to use totalitarian instruments to suppress the growing resistance of the working class and peasantry. In this framework, the centralisation of data and economic control – through the technological architecture of GSTN - Goods and Services Tax Network and new fiscal systems like PFMS – is exposed as a calculated act of domestic imperialism. It's designed specifically to dismantle the economic autonomy of states, neutralising local governments as potential allies of mass protests and rerouting state wealth exclusively towards the union government and corporate benefit.

The myth of minimum government

The neoliberal slogan of ‘minimum government, maximum governance’ has been transformed into ‘maximum centralisation of control’ in the Modi regime. The state is trying to establish political power here under the guise of efficiency for economic profit. The ultimate goal of this centralisation is to establish a techno-monolithic state that is beyond democratic questioning. This is achieved by deploying the language of technical efficiency – a narrative that seeks to depoliticise the transfer of sovereign power to centralised digital systems.Together, these data collection schemes establish a ‘technological dictatorship’ where power can be exercised without legal leeway or political accountability. Here, technology becomes a weapon of political control.

Reducing sovereignty to an algorithm

The concept of Instrumental Reason, elaborated by Frankfurt School thinkers Max Horkheimer and Theodor Adorno in their work ‘Dialectic of Enlightenment’, is crucial here. When modern rationalism becomes a system that does not ask about the ethics of ends, but only thinks about the efficient means to achieve those ends, reason itself becomes an instrument of domination.

The technical mechanisms of the Indian state are a concrete manifestation of this logic. The denial of SSA funds to Kerala is a political punishment – an attempt to economically subjugate states that oppose NEP 2020. But this political decision is presented as a technical ‘objective process’: “PM-SHRI MoU was not signed, so the PFMS system automatically blocked the funds.”

What is happening here is the technification of politics. Questions that should be politically debated and democratically decided – the economic autonomy of states, diversity in education policy, and the meaning of federalism – are reduced to technical issues. The question becomes not “Should NEP 2020 be implemented?” but “How to integrate PFMS into the system?” Politics is redefined as a management problem.

What the Union government achieves through this process is an escape from political responsibility. No one can be blamed – the system decided, the algorithm rejected, the matrix failed.

How control is coded in to design

Critical technology theorist Andrew Feinberg argues that technology is never neutral. Political choices are embedded in every technology design. Architecture itself is political.

Take the PFMS system for example. The Union government has decided to use a completely centralised technology, even though alternatives such as decentralised, federated systems or blockchain models are technically possible. Federated systems or blockchain models would have allowed states to maintain their own financial systems, sharing only the necessary information with the Centre. However, the Centre has deliberately chosen a model of full visibility, demanding real-time access to every financial transaction of the states. This is not a technical requirement; it is a political choice to maximise control.

Just as legislatures create laws, unelected software architectures encode political choices into the digital architecture of the PFMS. The crucial question is – if laws require democratic legitimacy, who discussed this code, why this wasn’t a parliamentary debate? Can states examine, challenge, or change the financial rules embedded in it? If the answer is 'no', then we are witnessing the rise of a technological dictatorship, where consulting firms and engineers arbitrarily encode political decisions into technological architecture.

Data colonialism and the mask of transparency

It is not enough to view data tyranny as mere surveillance; it must be recognised as data colonialism, where data is exploited today like raw materials in the colonial era. Network theory affirms that in centralised networks, information is power, and within systems like the PFMS there is an asymmetric structure: states act as peripheral nodes that generate data, while the Union government acts as the central node that collects, analyses, and controls it.

This asymmetric flow establishes epistemic hegemony, meaning that the Union government knows more about states than the states know about themselves, and this proprietary knowledge is power in itself.

The same logic applies to agribusiness, where corporations and central planners use data generated by farmers to exert control, defining this system as a new, extractive form of capitalism, where the resource is no longer minerals or crops, but data itself.

This data dictatorship operates under the ideological mask of “transparency,” “efficiency,” and “leak-proofing.” Antonio Gramsci’s concept of hegemony is relevant here: power is most powerful when it operates not only through force but also through consent, making this concealment necessary. However, this is a constructed transparency: citizens are fully visible to the state, yet the state remains opaque to citizens, and transparency has become fundamentally unidirectional. As Jack Balkin argues, power in the digital age is being reconfigured as “surveillance in the name of transparency.” While the PFMS system tracks every state transaction in the name of efficiency, the crucial decisions of the Union government – who sets the metrics, how the algorithm works, or the criteria for withholding funds – remain completely opaque.

The battle for democracy

In contemporary India, the state needs comprehensive surveillance and control to protect the vested interests of capital, which enables it to anticipate and suppress popular protests. Techno-governance platforms like Aadhaar, AgriStake, PFMS, and Aarogya Setu are direct answers to this need. As Hannah Arendt noted, dictatorship is “an attempt to completely eliminate the freedom of every individual.”

Data tyranny achieves this through algorithmic determinism: your data profile determines your future, leaving no room for variation or freedom.

The answer to the question of ‘why’ is clear and political. These technological tools are part of a project designed to protect capital interests and create a system that exists beyond democratic questioning.

To recognise and resist this process, we must develop critical technological literacy. This means not just reading the code, but reading the politics embedded in the code; understanding the political implications of the architecture of the system. States need to undertake a technological defence alongside constitutional defence. Demands for data sovereignty, technological autonomy, and the right to decentralised systems must be accompanied by legal challenges to integration projects like PFMS-SNA.

The future of the republic depends on a single question: Who will be India's system administrator? The executive's algorithm, or the sovereign people and the constitution?

Arun Kumar P.K. is a researcher at the Safar Foundation, Kolkata. He posts on X @akpk_in. 

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