Aadhaar Bill passage a landmark development: Panagariya

Terming the Aadhaar Bill passage as a landmark development, NITI Aayog Vice-Chairman Arvind Panagariya today said the unique identification number will be instrumental in giving people access to benefits and subsidies under the Public Distribution System (PDS).

"I think it was a landmark thing that has happened and I do see, now going forward, lot of use of the Aadhaar instrumentality in the disbursement of the benefits," Panagariya told reporters on the sidelines of the Advancing Asia Conference jointly organised by India and IMF here.

The Lok Sabha yesterday passed the Aadhaar Bill, providing statutory backing to the unique identification number for transferring government subsidies and benefits, as a money bill after government overruled opposition objections.

Panagariya said Aadhaar is going to be an instrumentality for the benefits under the Public Distribution System (PDS) and other benefits.

"I think there is also accompanying announcement in the Budget of the Direct Benefit Transfer (DBT) for example for fertiliser. it is a pilot right now, that is a complicated one to administer. But in the PDS and in the other benefits, Aadhaar is going to be an instrumentality now," he said.

In the Union Budget, the Finance Minister Arun Jaitley proposed to introduce DBT on a pilot basis for fertiliser in a few districts across the country, with a view to improving the quality of service delivery to farmers.

In reply to a question on NITI Aayog's role in the strategic sale in the central public sector enterprises (CPSEs), Panagariya said the methodologies are yet to be worked out and it will start working on it soon.

"Not yet on methodologies, we certainly get to work on this. We will very soon will work it out, what criterion will it use and then beyond that. This particular one announced in the Budget is about the strategic sale, which is basically transfer of ownership," he said.

On the rising NPAs in the banking system and the actions being taken to recover the dues, he said the law will apply even handedly as well as the government is taking host of steps to curb it.

"Just that finger has been pointed out at one that doesn't mean the others are off, though. Law will apply even handedly ...variety of options have been discussed in the government even what we call the bad banks, ARCs etc," Panagariya said.

"But that route is by nature very tough one, even technically it is very difficult. So right now I think the consolidation of the banks will probably precede that. IDBI Bank is being privatised. Dynamics will change and we will see perhaps some more action on the management side," he said.

Panagariya also said the government is very much constrained by the fiscal space but going forward the revenues are seen to be going up.

"We are very much constrained by the fiscal. You can't be holding the fiscal deficit at 3.5 per cent (of the GDP) and then also have a big kind of recapitalisation. Recapitalisation is a big challenge," he added.

"I am hopeful that more revenues will arise in 2016-17. ...that may allow us also down the road increase the funds for recapitalisation," Panagariya said.

On the prospects of further rate cuts by the RBI, he said the government has already stick to its fiscal management target in the Budget and now the ball is in the court of the Reserve Bank.

"For the fourth quarter, the advance estimate of the GDP growth forecast at 7.8 per cent, very close to the 8 per cent magic mark. The question really is when we can get to 8 per cent. Cross that and for that there is a context that I said for the monetary easing. And the kind of Budget the Finance Minister has presented, ball is now in RBI's court."

Panagariya has strongly pitched for a rate cut by as much as 50 basis points (0.5 per cent) by the Reserve Bank to spur the economic activity and growth.