Aadhaar vs direct benefit transfer

Updated: Jun 26 2013, 21:19pm hrs
When the first phase of the direct benefit transfer (DBT) was launched on January 1 for pension and scholarship benefits and could disburse only R40 crore in 43 districts, most wrote off Nandan Nilekanis UIDAI-based Aadhaar cards. It didnt help that leading banks like SBI refused to cooperate and asked for UIDAI to compensate it for any losses that may occur from making payments based on the Aadhaar systemthe government is looking at ways to resolve the issue. The problem with the DBT was that, in all the cases where it was tried, there were multiple authoritiesthe Centre and the states. Which is why the DBT for LPG, the pilot for which was started in 18 districts at the beginning of the month, was the real test since it was run by three central government-owned PSU companies, the companies were tech-savvy and ran computerised operations anyway and, most important, there were no state government officials involved.

While just 7 lakh households of the 76 lakh in these 18 districts have got their Aadhaar-based DBT, this is a great start in the short period the scheme has been in operation for, the number is likely to cross 10 lakh households by month-end. Right now, just 62% of those with LPG cylinders have Aadhaar numbersthis is expected to reach 80% in the next two months. And of those with Aadhaar numbers, just a fourth have bank accountsthis, in fact, poses a bigger challenge than getting Aadhaar numbers. While the authorities are confident they will be able to tackle the problem, maybe in a few months more than was initially planned for, the real issue is a different one. The UIDAI-based Aadhaar has proved it can deliver payments without any losses along the way. The question is whether the government has the will to extend the system to other areas. Its insistence on going ahead with the Food Security Bill and the refusal to use Aadhaar for making transfers for kerosene suggests the government is not fully convinced.