Social registry, for better targeting of welfare schemes

Context: A social registry linking Aadhaar to residence info can target aid to the vulnerable during a pandemic.

What is the need for Social registry?

• Recent estimates from the World Bank suggest that 88 to 115 million people could slide into poverty in 2020, which presents a tough challenge for targeting welfare beneficiaries.
• It also emphasises the need for post-disaster revalidation of any existing social registration database.

Case study: challenge of targeting welfare beneficiaries.: Examples from India and US welfare programs

The case of US:

• Few months back, the US government enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act that sends $1,200 to each individual below the income threshold of $75,000 to provide relief on account of the COVID-19 to poor and middle-class individuals and to stimulate the economy.
• However, according to The Washington Post millions of households were yet to receive their stimulus payments.
• The reason is, account information was available only for taxpayers who received their refunds in their bank accounts whereas, for the poor, whose incomes were below the income threshold, the authorities find difficulty in reaching them leading to exclusion from safety nets.

India’s Case:

• Under Pradhan Mantri Garib Kalyan Yojana (PMGKY), an ex-gratia payment of Rs 500 was credited to women Jan Dhan account holders.
• Similarly, Farmers registered for PM-KISAN also received Rs 2,000 in their accounts immediately.
• However, the money did not reach the most vulnerable households. For example, recipients of PM-KISAN were not amongst the poorest households. Data from round-3 of the NCAER Delhi Coronavirus Telephonic Survey (DCVTS-3), suggests that 21 per cent of farm households received transfers through PM-KISAN. However, 42 per cent of such households belonged to the wealthiest.
• Similarly, for the PMJDY payment, BPL and non-BPL households record similar receipt transfers. For example, nearly half of poor women are unlikely to receive PMJDY transfers.

What can we learn from these observations?

• Authorities need a registry containing data about individuals and the individual must have a functioning bank accounts for money to be transferred expeditiously.
• However, registries based on specific criteria (for example, identified BPL households) may not identify individuals most vulnerable to crises.
• The reason for this is, factors that contribute towards alleviating poverty may differ from the ones that push people into it that pose a challenge of targeting welfare beneficiaries.
• For example, about 40 per cent of the poor in 2012 were pushed into poverty by special circumstances and would not have been classified as being poor based on their 2005 conditions.

Can, the Universal social protection schemes can solve the problem of exclusion errors in welfare targeting?

• It will lead to serious fiscal impacts if expanded nationwide because most disasters are geographically clustered.
• For example, Floods or earthquakes often devastate a few districts not all, similarly pandemics may affect densely-populated cities more than villages.
• Hence Universal social protection schemes can benefit the well off more than the needy.

What is the way forward?

• Need to set up social registries that identify individuals, their place of residence, and their bank accounts, these linkages can be used to transfer funds to everyone living in the affected area quickly.
• Aadhaar linkages of individuals and bank accounts already exist. If residential information in the Aadhaar database can be efficiently structured, this would allow for geographic targeting.

Any social registry that can serve as a potential beneficiary platform for safety nets inherently runs the risk of violating individual privacy. To avoid privacy issues, such social registries can be allowed to store only basic information such as location, instead of more sensitive identifiers.

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