It is not just Nandan Nilekani’s dream project that is in trouble, nor is it just the government’s crucial election plank—aapka paisa, aapke haath—that is in danger of coming undone with the Supreme Court’s interim order saying that Aadhaar numbers are not mandatory for availing of government schemes. Indeed, this has always been the government’s official position, that even if people don’t have Aadhaar numbers, they will not be denied government benefits like subsidies. But this was only because less than half the country has Aadhaar numbers—once they have them, it remained unsaid, their use would have to become mandatory. Indeed, that was the very rationale for the scheme in the first place. In LPG, which is the smallest of the schemes run by the government in terms of the number of people it affects, about 2 crore of the 14 crore customers registered with the 3 oil PSUs that sell LPG are believed to be fake. If the use of Aadhaar cards is not made mandatory at some point in time, how are these fake customers to be weeded out? The problem gets bigger as we move on to the larger schemes such as PDS or now, the Food Security Act. In many states, the number of BPL ration card holders is greater than the total population. Which is why NSS data shows that only a small fraction of the poor actually benefit from the PDS. So whether the government uses Aadhaar to make cash payments to beneficiary bank accounts or whether it continues to give them subsidised foodgrain, the only way it can ensure only the deserving get the subsidised grain is through the use of Aadhaar cards—a poor person comes to a ration shop for her grain, the shopkeeper takes her fingerprint on a phone, sends it to the Aadhaar gateway for verification and, 5 seconds later, gets an SMS saying the person is or is not whom she says she is.
This is what the government needs to explain to the Supreme Court. If it spends over R3 lakh crore on subsidies alone each year, and