Aadhaar benefits: Saving wasteful expenditure

Aadhaar benefits: Saving wasteful expenditure

In its last session, Parliament passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill 2016. It was passed as a money bill to facilitate its safe passage in the Rajya Sabha, as the government lacks majority in the Upper House and thus never wanted to face embarrassment, which it did in the case of Land Acquisition (Amendment) and GST Bill. The safe passage of the Aadhaar Bill is being considered a game changer and a big success.

Aadhaar was given legal status by the previous UPA government as a provision was made to give unique identity to all residents (including children) by assigning a 12-digit number on the Aadhaar card. The then UPA government could not get the Bill passed due to intense opposition from the BJP and other opposition parties.

During the Lok Sabha elections of 2014, the BJP had opposed Aadhaar. However, after coming to power, the party thought that it is a good proposition as, with the help of Unique Identification (UID), residents’ financial subsidies and other public services could be targeted more efficiently.

It was also felt that the apprehensions expressed about the assault on privacy could be taken care of by making appropriate statutory provisions. However, though Aadhaar Bill 2010 and Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill 2016 are seemingly no different from each other, there are a number of dissimilarities with the two.

According to the 2016 bill, if a person has resided in the country for 182 days or more, he/she is entitled to get an Aadhaar card. According to this bill, if a person has to avail a subsidy or a service from the government, he must either possess an Aadhaar card or must have applied for the same. These provisions were not there in the 2010 bill.

According to the 2016 bill, information related to an Aadhaar number holder’s fingerprints and iris scan shall not be published or displayed publicly, except for purposes specified by the regulations. When authenticating an individual’s identity, the UID authority cannot reveal information related to iris scan and fingerprints to the entity requesting for authentication. All these provisions were not there in the 2010 bill. Therefore, one can say that an attempt has been made to address the concerns about privacy in the 2016 bill.

In order to grant legal status to Aadhaar, the 2010 bill was unsuccessfully attempted by the UPA II government. The NDA had opposed it, saying a lot of private information would be taken while making Aadhaar card and if this data goes to other people, privacy could be jeopardised. Later on, the courts also gave their ruling against granting a legal status to Aadhaar and making it an essential condition to take the benefits of government support.

Earlier, when the concept of Aadhaar was proposed and later the Unique Identification Authority of India (UIDAI) was given statutory recognition, there was no clarity about its usage. For the public, this was merely an easy way to get an identity card. Easy availability of Aadhaar card without there being any proof of citizenship, gave rise to apprehensions that this instrument may provide legitimacy to foreign intruders (especially to those from Bangladesh).

Transferring benefits
Once former prime minister Rajiv Gandhi had said that 85% of the money sent to poor and general public does not reach the intended beneficiaries and evaporates on the way. Experience so far reveals that the food and petroleum subsidy given by the government does not fully reach the intended beneficiaries and there is a lot of leakage in between.

According to the erstwhile Planning Commission, to transfer food subsidy of one rupee to the intended beneficiaries, the government has to spend Rs 3.85. Similarly, the benefits of Mahatma Gandhi Rural Employment Guarantee Programme (MGREGP) do not fully reach the intended beneficiaries. Fertiliser subsidy given for chemical fertilisers goes to the companies and does not reach the farmers fully. A decade back, it was impossible to even think of transferring the benefits from the government directly to the targeted beneficiaries.

Thanks to the technology, it is now possible to transfer the benefits of subsidy and other services directly to the bank accounts of the beneficiaries without much cost. For this, what we need is a bank account and a unique identification of the beneficiaries.

Earlier, because of hiccups in opening a bank account and requirement of minimum balance, a person belonging to poorer sections was unable to open an account. However, under Jan Dhan Yojna, nearly 18 crore new bank accounts have been opened with zero balance requirements. Along with this, extremely low cost new insurance schemes have also been launched, encouraging more people to open their bank accounts.

According to official figures, out of 127 crore population, more than 100 crore
possess the Aadhaar card covering 93% of adult population. In 25.5 crore bank accounts, Aadhaar number is registered. Persons with less than 18 years of age can also get their Aadhaar card. However, very few of them have actually got their cards made. Therefore, universal coverage of Aadhaar is possible in the near future, especially after passage of Aadhaar Bill of 2016.

With almost universal coverage of bank accounts of households and Aadhaar card, now it has become easier to transfer benefits directly to the targeted population. This scheme may save billions of rupees as LPG and food subsidy, MNREGA wages and many other benefits can reach the targeted beneficiaries without leakage.

According to the government, this could save Rs 70,000 crore to the exchequer. If this is correct, Aadhaar  Bill 2016 will prove to be a big game changer.

(The writer is Associate Professor, PGDAV College, University of Delhi)

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