April 16, 2016

Factsheet on Aadhaar for Delivery of Subsidies, Benefits and Services

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 intends 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 following are points for consideration with respect to the above claims:

1. Good Governance   

a.        The Bill makes no provision for eligible beneficiaries to file a complaint for denial of service due to the failure of the process of aadhaar identification and authentication, for whatever reason.
b.   There is no accountability fixed on the implementing agency/department responsible for delivering public services to address the denial of service to eligible beneficiaries, due to the failure of the process of aadhaar identification and authentication.
c.        There is no provision for the citizen to be rewarded compensation for being denied a service or benefit due to the failure of the process of aadhaar identification and authentication.
d.       For example, when an existing pension beneficiary’s aadhaar identification and authentication fails (for reasons such as: poor connectivity at the point of service, unrecognized biometrics, mistake of seeding of bank account, no aadhaar number assigned etc.), there is no mechanism for the pensioner to file a complaint with the implementing agency/department concerned, and there is no time bound standard operating procedure for the administration to respond to and redress this situation. In addition, the pensioner is not entitled to receive any compensation for the duration that he/she has been devoid of receiving his/her rightful benefit.

2. Efficient - as per the Statement of Objects and Reasons of the Bill, “In the absence of a credible system to authenticate identity of beneficiaries, it is difficult to ensure that the subsidies, benefits and services reach to intended beneficiaries.”

a.        The two kinds of corruption that are claimed to be addressed by the proposed architecture in the Bill are related to duplication and ghost beneficiaries. This is done by prevention of the same aadhaar card holder from claiming the same entitlement twice, thus eliminating duplication. It also prevents a beneficiary from claiming a service without verification of his/her details with the aadhaar database, thus eliminating ghosts.
b.       However, being able to execute these two conclusively will only be possible if 100% of the database of a programme is seeded with the aadhaar database, i.e all beneficiaries of a subsidy have aadhaar seeded bank accounts. If even one beneficiary is legitimately receiving a subsidy outside of the aadhaar platform, then there can be no conclusion on complete elimination of duplicates or ghosts. For example, a beneficiary will be considered as a ghost beneficiary simply because their details have not yet been seeded with the aadhaar database, as opposed to that person actually not existing.
c.        Other forms of misappropriation through coercion and collusion will continue, unaffected by this system, like the following examples from MGNREGA:
  • i.                     A worker who does not work but through collusion, gets his/her name on the muster roll and gets paid wages into an aadhaar linked bank account.
  • ii.                    A worker who has worked, but is paid less wages (through incorrect measurement of work) or more wages (through collusion) than he has actually worked, into an aadhaar linked bank account.

  • iii.                  Inflation of technical estimates and material costs required for work execution which benefits vendors and implementing agencies.

    3. Transparent

    a. The Right to Information Act, 2005 was seminal in its assertion of equating the officials’ right to know to the peoples’ right to know, thereby mandating the disclosure of official records to the public. Section 4(1)(b)(xii) explicitly mandates Public Authorities to pro-actively disclose “
    the manner of execution of subsidy programmes, including the amounts allocated and the details of beneficiaries of such programmes.”  This has been a critical input to enable citizens to monitor the implementation of public programmes allowing corroboration of actual reality with official records, due to the latter being in the public domain. The understanding that information is a necessary condition for social accountability, has evolved over several decades of practice.b.  As per the Aadhaar Bill, the UIDAI will be an additional repository of all records of entitlements received by aadhaar card holders, apart from the implementing agency/departments concerned. While the requirement for pro-active disclosure of records of beneficiary entitlements by implementing agency/department has percolated and is governed by the principles of the RTI Act, the requirement of disclosure of the same by the UIDAI is unclear. The uncertainty of disclosure of records of entitlements of beneficiaries held by the UIDAI, is likely to jeopardise the hard won ground on public disclosures gained so far.c.      A key component of information is record maintenance. There is no provision in the current Bill for any duties of record maintenance at points of service/delivery. The assertion that all transactions and therefore payments are electronically authenticated and delivered, is likely to result in a situation where implementing agencies/departments fail to maintain physical records on the ground. This will severely impede social accountability and the ability of citizens and beneficiaries to track the spending of public funds at the local level.

  • 4. Targeted - as per the Statement of Objects and Reasons of the Bill, “the failure to establish identity of an individual has proved to be a major hindrance for successful implementation of these programmes.”  
    a. In response to a RTI application[1] only 0.03% of the persons enrolled with UIDAI had no other prior identity document. This implies that establishing identity was relevant to only 0.03% of all the people enrolled under aadhaar.

    b. Identification is not to be equated with eligibility. While a person may be identified by the aadhaar database, this does not negate the need for the citizen to fulfil all prior eligibility criteria as set by the implementing agency/department to access a benefit. Therefore the aadhaar authentication is an added not enabling step for the citizen to claim a service.

    c. The reason persons are unable to access subsidies is overwhelmingly due to a lack of adequate funds for social sector subsidies and benefits which caps the number of beneficiaries at any point of time.

      d. For example, an aadhaar number will identify someone as Mr. Paswan but he still has to show that he is above 60 years of age and Below Poverty Line to avail of an old age pension. After demonstrating eligibility, his name will go onto a waiting list for pension applications which will get approved based on funds available for the pension scheme.



[1] Reference here: http://india-seminar.com/2015/672/672_reetika_khera.htm

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