Can Aadhaar be a game changer?

Recently Parliament passed the ‘Aadhaar’ (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill as a money bill to facilitate its safe passage. The government lacks a majority in the Rajya Sabha and thus wanted to avoid the embarrassment it faced in the case of Land Acquisition (Amendment) and GST Bills.

Safe passage of the Aadhaar legislation is being considered as a game changer and a big success. Aadhaar was given legal status by the previous UPA government, as provision was made to give unique identity to all residents (including children) by assigning a 12 digit number.

The UPA government could not get the Aadhaar Bill 2010 passed due to intense opposition from Bharatiya Janata Party and other opposition parties. During the Lok Sabha elections of 2014, the BJP had opposed Aadhaar. However, after coming to power the party thought it was a good proposition, as with the help of Unique Identity (UID) of residents’ financial subsidies and other public services could be targeted more efficiently. It was felt that apprehensions expressed about the assault on privacy could be taken care of by making appropriate statutory provisions. We must understand that although the 2010 Bill and the current legislation seem similar, there are several dissimilarities.

According to Aadhaar Bill 2016, if a person has resided in the country for 182 days or more, he/she is entitled to get an Aadhaar card. A person is entitled to avail of a subsidy or a service from the government if he/she either possesses an Aadhaar card or has applied for it. These provisions were not there in the Aadhaar Bill 2010.

According to the current legislation, information related to an holder’s fingerprints and iris scan shall not be published or displayed publicly, except for purposes specified by regulations.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. Therefore one can say that an attempt has been made to address concerns about privacy. In order to grant it legal status, the Aadhaar Bill 2010 was unsuccessfully attempted by the then UPA government. Later, courts also ruled that Aadhaar could not be made an essential condition for availaing benefits. When the concept of Aadhaar card was brought in and the Unique Identity Authority (UIDAI) given statutory recognition, there was no clarity about the usage of data. For people at large, this was merely an easy-to -obtain identity card.

Easy availability without proof of citizenship gave rise to apprehensions that this instrument may provide legitimacy to foreign intruders (especially from Bangladesh).

Once Rajiv Gandhi, our former Prime Minister, had said that 85 per cent of the money sent to the poor did not reach the intended beneficiaries. Our experience is that the food and  petroleum subsides do not fully reach the intended beneficiaries. Apart from this, in order to provide food security to people, government has to maintain huge buffer stocks and this involves substantial budgetary support.

According to the erstwhile Planning Commission, transfer of food subsidy of one rupee costs Rs. 3.85. Similarly the benefits of Mahatma Gandhi Rural Employment Guarantee Programme do not fully reach intended beneficiaries. Fertilizer subsidy given for chemical fertilizers 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 techniques today, it is possible to transfer benefits of subsidy and other services directly to bank accounts of the beneficiaries without much cost. A bank account and a unique identify number overcomes this hurdle. Earlier, because of issues with opening a bank account and requirement of minimum balance, a poor person was unable to open an account. However, under the Jan-Dhan Yojna, nearly 18 crore new bank accounts have been opened with zero balance requirements.

In fact, 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 a 1.27 billion population, more than 1 billion possess Aadhaar cards; thus. 93 per cent of the adult population today has the cards. The Aadhaar number is registered in 255 million bank accounts. Persons under 18 years can also get their Aadhaar cards; however few have actually got these made. Overall thus it seems that universal coverage of Aadhaar is possible in the near future, especially after passage of Aadhaar Bill 2016. With almost universal coverage of bank accounts of households and the Aadhaar card, it has become easier to transfer benefits directly to the targeted population.

This scheme may save billions of rupees, as now LPG subsidy, 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 for the exchequer. If this is correct, the measure could prove to be a game changer.