New Public Management, Digital Governance, and Organizational Performance: Empirical Evidence from Public Sector Reforms in India

Abstract

Public sector reform in India has undergone significant transformation through twin imperatives: the adoption of New Public Management (NPM) principles under successive administrative reform commissions, and the accelerating digitalization of governance driven by flagship programmes such as Digital India and the National e-Governance Plan (NeGP). While a growing body of structural equation modelling (SEM) research has examined NPM reforms and digital governance (DG) as separate lines of inquiry, typically within OECD or single-city settings, and rarely with full measurement validation, empirical evidence integrating NPM adoption, DG, organizational performance (OP), and public trust and accountability (PTA) within one validated, mediation-tested SEM model remains scarce in the Indian context. This study addresses that gap through a cross-sectional survey of 360 Indian Administrative Service (IAS) officers and senior Group A civil servants across four purposively selected central government ministries in New Delhi. Convergent and discriminant validity were established (average variance extracted ≥ .56; heterotrait–monotrait ratios < .72) prior to structural testing. The hypothesized model demonstrated acceptable fit (χ²/df = 2.14, CFI = .951, TLI = .943, RMSEA = .056, SRMR = .048). Hierarchical multiple regression and SEM indicate that NPM adoption (β = .381, p < .001) and digital governance (β = .328, p < .001) are significant independent predictors of organizational performance (R² = .524). Organizational performance partially mediates the pathway from reform inputs to public trust and accountability (indirect β = .108 and .093 for NPM and DG respectively, both bootstrap 95% CI excluding zero). Digital governance exerts a larger direct effect on PTA (β = .305) than NPM adoption alone (β = .237), suggesting that India's digital infrastructure investments generate accountability dividends beyond what administrative restructuring alone can produce. These findings, interpreted cautiously in light of the study's cross-sectional design, self-reported measures, and four-ministry sampling frame, offer theoretically grounded and policy-relevant insights for reformers navigating the institutional landscape of one of the world's largest public bureaucracies.