From ‘Operation Mule Hunt’ to AI-Powered Surveillance, a New Era of Digital Monitoring in Gujarat

Dilip Patel
Ahmedabad

Gujarat Police and the Cyber Centre of Excellence have uncovered a cyber fraud network involving ₹2,289 crore under “Operation Mule Hunt 1.0.” With action taken against 913 mule accounts, 565 FIRs registered, and 638 arrests made, the operation is being described as one of the largest cyber-financial crackdowns in the state’s history.

However, the development has reignited a broader debate—not only about cybercrime, but also about the rapid expansion of intelligence gathering, digital surveillance, and data-monitoring systems in Gujarat over the past two decades.

A Question First Raised in 2008

Concerns about rising expenditure on intelligence and surveillance mechanisms in Gujarat are not new.

In 2008, during the tenure of then Chief Minister Narendra Modi, additional budgetary allocations were reportedly made to expand the state’s intelligence network. At the time, political circles alleged that the surveillance apparatus was being used not only for security purposes but also to monitor political opponents, internal BJP rivals, social activists, and certain business leaders.

Former Chief Minister Suresh Mehta alleged that his daily activities were constantly monitored. Former Surat MLA Dhiru Gajera also claimed that phone records of politicians across the state were being analyzed.

These allegations were never officially confirmed, but the growing intelligence expenditure sparked significant political debate.

From ₹10 Crore to ₹1,500 Crore

Government spending on intelligence and technical surveillance has increased dramatically over the last two decades.

Available budget documents indicate that intelligence-related expenditure stood at around ₹10 crore in 2001-02.

In 2007-08, Gujarat’s police budget was approximately ₹1,900 crore, with dedicated allocations for modernization and technical surveillance.

By 2013-14, the police budget had risen to nearly ₹3,800 crore, reflecting increased investment in modernization, communication systems, and intelligence infrastructure.

In the 2026-27 Gujarat budget, nearly ₹9,000 crore has been allocated for policing and security infrastructure. Significant provisions have been made for AI-based policing, Data Fusion Centres, cybersecurity systems, analytics platforms, and anti-drone technology.

According to the government, these investments are aimed at addressing terrorism, organized crime, cybercrime, and emerging national security threats.

What is Operation Mule Hunt?

Mule accounts are considered one of the most critical components of cybercrime operations.

A mule account is a bank account used by cybercriminals to transfer, layer, and launder money obtained through fraud.

In many cases, such accounts are opened in the names of ordinary citizens. Some individuals knowingly rent out their bank accounts for commissions, while others become involved without fully understanding the consequences.

For cybercriminals, mule accounts serve as essential tools for moving illicit funds and concealing financial trails.

To dismantle such networks, Gujarat Police launched “Operation Mule Hunt 1.0” in 2025.

Links to 4,052 Cybercrime Cases

The investigation involved data analysis from cybercrime units, the Indian Cyber Crime Coordination Centre (I4C), the National Cyber Crime Reporting Portal, the 1930 helpline, and various banking institutions.

Authorities identified financial networks linked to 4,052 cybercrime cases across India, including 491 cases directly connected to Gujarat.

The operation resulted in:

• Action against 913 mule accounts
• Registration of 565 FIRs
• Arrest of 638 accused persons
• Identification of suspicious financial transactions worth ₹2,289 crore

The findings suggest that cyber fraud has evolved beyond isolated online scams into a sophisticated parallel financial-crime ecosystem.

Significant Drop in Suspicious Withdrawals

According to government officials, the crackdown has led to a substantial reduction in suspicious banking transactions.

Cheque-based withdrawals linked to mule accounts reportedly declined:

• From ₹126 crore per month
• To approximately ₹25 crore per month

This represents a reduction of nearly 75 percent.

Suspicious ATM withdrawals have also reportedly fallen by around 66 percent, while the number of first-layer mule accounts has decreased significantly.

New Methods of Cybercrime

Cybercriminals are increasingly adopting sophisticated techniques, including:

• Digital arrest scams
• Fake KYC update frauds
• OTP-sharing scams
• QR code fraud
• Online investment scams
• Loan-app fraud
• Fake job offers
• Social media scams

Rather than receiving stolen money directly, criminals route funds through mule accounts and multiple transaction layers to obscure the financial trail.

AI Takes Centre Stage

In 2008, intelligence operations primarily relied on human informants, Call Detail Records (CDRs), mobile-location tracking, and conventional surveillance techniques.

By 2026, the landscape has changed dramatically.

The state is now investing in:

• AI-based policing
• Data Fusion Centres
• Centres of Excellence for AI in Policing
• Anti-drone systems
• Advanced cyber analytics

AI-powered systems can analyze millions of digital transactions and identify suspicious patterns in real time.

MuleHunter.AI and Risk Scoring Systems

Under guidance from the Reserve Bank of India, the Indian Digital Payment Intelligence Corporation is developing a new risk-scoring framework.

The system will classify every digital transaction into:

• Low Risk
• Medium Risk
• High Risk

Based on these classifications, banks will be able to take quicker action against suspicious accounts and transactions.

A centralized registry known as MuleHunter.AI is also being developed to facilitate real-time information sharing among banks regarding suspicious accounts.

Security or Surveillance?

Experts agree that advanced technology is essential for combating cybercrime.

At the same time, questions remain regarding the balance between security and civil liberties.

The debate that once centered on phone surveillance and call-record monitoring has now expanded to AI-driven analytics, data fusion systems, and large-scale digital monitoring.

Governments and law-enforcement agencies argue that these technologies are necessary tools for crime prevention and public safety. Privacy advocates, however, emphasize the importance of transparency, accountability, and safeguards for individual rights.

The New Challenge of the Digital Age

The exposure of a ₹2,289-crore cyber fraud network is more than a successful police operation.

It highlights how criminal activity has increasingly shifted into digital spaces and how governments are responding with AI, data analytics, and real-time monitoring technologies.

Over the past two decades, Gujarat’s expenditure on intelligence and digital-monitoring infrastructure has expanded significantly. The central question now is how to maintain a balance between enhanced security and the protection of civil liberties in an era of rapidly advancing surveillance technology.

The outcomes of AI-based policing, mule-account tracking systems, and digital financial monitoring initiatives will play a crucial role in shaping that debate in the years ahead.

This article is written in an analytical news-feature format. References to political allegations and claims are presented as allegations and claims, and not as established facts.