The Unique Identification Authority of India (UIDAI)’s ambitious plan of issuing a unique biometric-enabled number, innocuously called ‘aadhaar’, to every Indian resident has finally begun to generate a debate on citizen-State relations, privacy, financial implications, and operational practicalities.
What the debate has largely missed so far, however, is the credibility of the UIDAI’s claims in the field of social policy, particularly the National Rural Employment Guarantee Act (NREGA) and Public Distribution System (PDS). Tall claims (“the project possesses the power to eliminate financial exclusion, enhance accessibility, and uplift living standards for the majority poor”) have been made. Scrutinising the UIDAI’s documents reveals their poor understanding of how PDS and NREGA leakages occur and little evidence of creative thinking on plugging them. Instead, one is treated to rhetorical statements peppered with the ‘Aadhaar-enabled’ buzzword.
In the days of cash payments of wages, it was quite easy to embezzle NREGA funds by inflating attendance records and pocketing the difference. In 2008, the government made it mandatory for all NREGA wages to be paid through banks and post offices. The introduction of payments through accounts has made corruption difficult, but three ways of siphoning off money remain — extortion, collusion and fraud. Extortion means that when ‘inflated’ wages are withdrawn by labourers from their account, the middleman turns extortionist and takes a share. Collusion occurs when the labourer and the middleman agree to share the inflated wages that are credited to the labourer’s account. Fraud means that middlemen open and operate accounts on behalf of labourers and pay them cash. Biometric-enabled UID to authenticate identity can only help to prevent ‘fraud’, but is of little use in preventing collusion or extortion.
Even on the specific issue of eliminating fraud, the UIDAI’s thinking is muddled. “Once each citizen in a job card needs to provide his UID before claiming employment, the potential for ghost or fictitious beneficiaries is eliminated.” Elimination of ghost beneficiaries would be an important contribution, but as the same sentence makes clear, it requires compulsory and universal enrolment. Yet, public statements convey that UID enrolment will be voluntary.
Nilekani speaks of “how having a UID can give automatic benefits” (Indian Express). In practice, there will be automatic exclusion as those who do not enrol will be turned away. We learnt this lesson the hard way in the transition to bank payments. Poorly-equipped and understaffed banks were expected to open millions of NREGA accounts overnight. Labourers began to be denied work — “no account, no work,” they were told. The UIDAI is also poorly informed. “In many areas the wages continue to be paid in the form of cash.” In fact, the transition to bank payments is largely complete (83 per cent NREGA job cardholders have an account). Tamil Nadu is the only ‘area’ where wages continue to be paid in cash (retained for the sake of speed).
Sometimes the UIDAI documents contain plain gibberish. Jumping on the social audits bandwagon, they say: “The village-level social audit committee can be selected after authentication with the UID database. The social audit reports filed by the village-level committees can be authenticated by the biometrics of the committee members and the social audit coordinator.” Turning to the PDS, the most important contribution of the UID would be to eliminate duplicate cards. But what proportion of cards in circulation are duplicates? The little reliable data on this suggest it is not large: 2 per cent in Tamil Nadu and Chhattisgarh’s computerisation drive to issue hologram-enabled cards eliminated 8 per cent duplicates.
The UIDAI believes that “a key source of leakage identified in the PDS, is subsidised food drawn from the ration shop in the names of eligible families by someone else”. Again, a quick tutorial on PDS leakages might help. There are two major sources of leakage from the PDS: one, diversion of grain, en route to the village ration shop. Dealers then appear helpless saying that they have been issued less by the authorities. Two, dealers undersell (e.g., only 25kg out of the 35kg entitlement) and yet make people testify on official records that they got their full quota. When villagers are disempowered and forced to buy from the same dealer, they feel resigned to being cheated.
The UIDAI recommends that people be freed from the monopoly of dealers, i.e. if he is corrupt, they can go to another. (Finally a usable idea, but alas, an old one.) Conflating the UID with benefits, the UIDAI goes on to make a bogus claim of “portability of benefits” (at least four times in their paper). Portability of benefits requires grappling with operational issues that Aadhaar cannot solve.
Aadhaar is about “inclusivity, the purpose is a better quality of public service delivery, it’s about giving people, who have been denied identity, a chance” (Nilekani, Economic Times). Yet, the UIDAI states: “The NREGA programme can be used to enrol residents into the UID programme” and that the PDS “will provide the necessary impetus for penetration of UID”. If the idea is to use the existing NREGA and PDS database to enrol people, where does ‘inclusivity’ come in? Perhaps the UIDAI needs the PDS and NREGA databases more than these programmes need the UID.
If the UIDAI is serious, it must think about the difficult questions: what if the grain/wages are snatched away after authentication, or if tele-links or hand-held devices break down? What about the costs involved? Illegal fees are routinely charged for ration and job cards — what prevents this from happening while finger-printing? Most importantly, what will Aadhaar add to what can be achieved by computerisation of operations, a reliable MIS, and simpler ‘technologies’ for transparency (e.g., the information walls in Rajasthan)?
If the rhetoric on inclusivity is only a ‘PR’ exercise, what actually drives the UID project? As former Intelligence Bureau chief A.K. Doval candidly said in Tehelka, “It [UID] was intended to wash out the aliens and unauthorised people. But the focus appears to be shifting. Now, it is being projected as more development-oriented, lest it ruffle any feathers.”
Reetika Khera is a development economist at the Delhi School of Economics The views expressed by the author are personal