Government looking to give services to deserving and plug leakages after passage of aadhaar bill – timesofindia-economictimes

In passing the bill without changes, the lower house, where the NDA has a comfortable majority, snubbed the upper house (it cannot vote on money bills) which had suggested five amendments to the original bill. “The ends were good, the means were bad, and the price was too high,” commented former finance minister P Chidambaram in a newspaper column.

Aadhaar forms the backbone of the current government’s JAM (Jan Dhan frills-free bank accounts, Aadhaar, Mobile phones for transactions) trinity to deliver public services and entitlements such as student scholarships and cooking gas, food and fertiliser subsidies which currently amount to a little less than 2% of India’s GDP.

For decades, India has poured many billions of public money into welfare schemes in an attempt to lift millions of its citizens out of grinding poverty. Large amounts of that money leaked out from the schemes depriving millions of beneficiaries their due as the state struggled to identify and separate the deserving from the undeserving.

Economists Ashok Gulati and Shweta Saini of the Indian Council for Research on International Economic Relations found in a 2015 study that 46.7%, or 25.9 million tonnes, of food grains supposed to have been distributed through the public distribution system (PDS) in 2011-12 never reached the intended beneficiaries.

“The main argument in fafavour of income policy (direct cash transfers) is that it can plug leakages of grain by linking cash transfer to UID under Aadhaar, reduce efficiency losses as it would be less trade/market distorting and cut down on ‘rent seeking’ by various intermediaries in the grain chain,” they said in the paper.

Plugging Wastages The Aadhaar project designed and led by Infosys co-founder Nandan Nilekani was started seven years ago to create a database of all Indian citizens capturing their demographic and identity details and assigning a unique number to each person. “Many Indians don’t have any document that proves their existence vis-a-vis the state government. That’s the basic problem we’re trying to solve,” Nilekani had said when he headed the Unique Identification Authority of India (UIDAI), which is responsible for building and operating the digital infrastructure and safekeeping the data of enrolled citizens.

It began as an executive ordered project where citizens would enroll voluntarily, but the government in 2010 sought to back it with legislation. It has finally been done now ensuring legal cover to about 99 crore people who had so far voluntarily enrolled on the platform.

Security concerns and questions regarding privacy remain (the Supreme Court is hearing a case whether Aadhaar violates privacy), yet it is clear that the unique identification number is here to stay. Korath Mathew, chief operating officer at CSC E-Governance, told ET that Aadhaar is using biometrics to empower people by uniquely identifying them. CSC E-Governance operates the 15,000 permanent Aadhaar enrolment centres across the country.

Mathew, who until six months ago was helping develop Aadhaar-based applications at UIDAI, said 95% of all citizens above the age of 18 already have an Aadhaar number and there are currently 50 lakh daily biometric authentication transactions.

“Aadhaar is a unique ID and can be authenticated from anywhere. It is also a very accurate financial address,” Mathew said. Discussing the Aadhaar Bil l in Parliament, Finance Minister Arun Jaitley said the central government had already saved `15,000 crore by using technology and targeting the subsidy for cooking gas. Those claims were debunked by the Global Subsidies Initiative of the International Institute of Sustainable Development in a paper published on the same day the Aadhaar Bill was passed by Parliament.

The institute’s calculations using publicly available data showed that excluding costs, integration of Aadhaar for direct benefit transfer resulted in total savings on LPG subsidy expenditure of just `121 crore in fiscal year 2015-16.

Offset against an assumed average enrollment cost of Rs 120 per person, the marginal cost of enrolling just those customers with Aadhaar-seeded LPG connections as of March 1, 2016 was nearly Rs 1,343 crore, or ten times greater than the fiscal saving, the paper said. Nevertheless, the government is pressing ahead with the project.