1. Corridors of Power: Just issuing 100 crore Aadhaars not enough

Corridors of Power: Just issuing 100 crore Aadhaars not enough

Utilisation of Aadhaar in disbursement of subsidies and entitlements has been slow and patchy, and there is hardly any sign of a major change in this in the NDA regime also

By: | Updated: April 7, 2016 2:37 AM
Utilisation of Aadhaar in disbursement of subsidies and entitlements has been slow and patchy, and there is hardly any sign of a major change in this in the NDA regime also Utilisation of Aadhaar in disbursement of subsidies and entitlements has been slow and patchy, and there is hardly any sign of a major change in this in the NDA regime also

April 4, 2016, will be remembered as a landmark day in the Indian reforms history. The Unique Identification Authority of India (UIDAI) generated the 100th crore Aadhaar on this day, after traversing a tumultuous journey of five-and-a-half years. Though the first Aadhaar number was issued on September 29, 2010, that it took so long to reach the 100-crore mark tells its own story.

The project faced opposition from within the government during the UPA regime, before the Congress party projected it as a game-changer scheme. It almost appeared stuck after the party got a drubbing in 2014 polls, but thanks to the political masterstroke of latching on to it by the NDA Prime Minister Narendra Modi, the whole exercise has got a much-needed centre-stage attention now, due to the Jan-Dhan and other flagship schemes of the government like Digital India.

The UIDAI was constituted on January 28, 2009, as an attached office of the erstwhile Planning Commission. Nandan Nilekani, who was appointed its first chairman on July 2, 2009, steered the project despite teething troubles, especially due to its overlap with the National Population Register (NPR) programme and privacy issues, until he decided to fight the 2014 Lok Sabha polls on a Congress ticket. Although the UPA government had launched the Aadhaar-based direct benefit transfer (DBT) scheme on January 1, 2013, in the absence of adequate preparation and the non-UPA states’ reluctance to embrace it, it didn’t yield desired results in the 2014 Lok Sabha elections for the party.

While there is no doubt that the current government has done well by continuing with the Aadhaar project, the pace of implementation of Aadhaar-based identification process in the government schemes and services still remains a big concern area. The government release issued on Monday after Aadhaar enrolment touched the 100-crore mark is self-explanatory. Though 93% people above the age of 18 have Aadhaar now—over 90% population in 13 states and Union Territories, and 75-90% in 13 other states, has been covered by Aadhaar—when it comes to the real objective of bringing a systemic change in the way services, subsidies and benefits will be directly delivered to the deserving, the situation is hardly encouraging. The only big success area is DBT in LPG, both in the UPA and the NDA regimes, and that too because of efficient handling by the public sector oil companies and not the government.

According to the government release, the estimated savings through the Pahal scheme (DBT in LPG) are R14,672 crore, while in PDS these are just R2,346 crore across four states—Andhra Pradesh, Telangana, Puducherry and Delhi. The situation in other schemes—in scholarship, the estimated savings are Rs 276 crore across three states of Andhra Pradesh, Telangana and Punjab; in pensions (NSAP), these are Rs 66 crore across Jharkhand, Chandigarh and Puducherry—shows that the objective of saving substantial amount by using Aadhaar-based identification in the about R5 lakh crore annual payments of entitlements and subsidies is far from taking off in any serious manner.

It is true that 25.48 crore bank accounts, over 12.28 crore (71%) LPG connections, more than 11.39 crore (45%) ration cards, over 5.90 crore (60%) NREGA cards, and 45 lakh income-tax returns are now linked to Aadhaar, there is a need to extend the Aadhaar-based payment system in a big way. Although the government has claimed that the total number of transactions on the APB (Aadhaar Payment Bridge) was logged at 94.71 crore worth R28,363 crore—a handsome rise compared to the data on May 31, 2014 (7.13 crore APB transactions worth R4,474 crore)—this is far from the required level to have any substantial impact.

The extension of Aadhaar-based DBT to PDS, fertiliser subsidy and also other government schemes and its utilisation has to match the Aadhaar penetration level, and that can only be done through a coordinated national strategy to be implemented with the full participation of states. It will be a good idea to create a separate Aadhaar-based DBT implementation set-up by the Centre, which will coordinate with all the stakeholders—central government ministries and departments, states, banks and other financial institutions, and the UIDAI—to quicken its pace.

The passage of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits, and Services) Bill 2016 in Parliament in the current session and its notification—providing Aadhaar the badly-needed statutory status—can prove to be a big catalyst in this exercise. As it seeks “to provide for, as a good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals”, the central government can use this law now to not only quell the opposition from various quarters in the extensive use of Aadhaar, but also in persuading states to adopt Aadhaar in their schemes and administrative functioning.

The Act clearly states that “the Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt there from forms part of, the Consolidated Fund of India, require that such individual undergo authentication, or furnish proof of possession of Aadhaar number or in the case of an individual to whom no Aadhaar number has been assigned, such individual makes an application for enrolment:

Provided that if an Aadhaar number is not assigned to an individual, the individual shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service.”

Even though the government has tried to ensure that the subsidy and benefits are not denied to anybody not fulfilling the Aadhaar-identification requirement, it is imperative that an efficient national system is put in place to keep track of all transactions and beneficiary data, and this is where the dedicated DBT department of the government can prove to be a game-changer.

Some positive signs of successful Aadhaar use, undoubtedly, are visible in the PM Jan-Dhan Yojana, NREGS, and in the government employee attendance system, but this is not enough—the real celebration for 100 crore Aadhaar cards will be putting them to good use.


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