Never done this in India, but other countries have a similar system.
If you walk through the green channel, then normally your baggage will not be searched or scanned. You just walk through and out into the public area.
So, you ask, doesn't everyone do this, whether or not they have things to declare? Because there are people watching the lane, and if they want they can stop you and search. If you are found with items to declare you will be charged with smuggling, which is criminal offence. If you are lucky you might be able to talk the punishment down to a fine, but there is a chance you could end up with a criminal record.
Also the people doing the watching are trained to spot likely smugglers, so it isn't just a random chance.