The efficiency myth of Aadhaar linking

News: Recently, Lok Sabha and Rajya Sabha have passed the Election Laws (Amendment) Bill, 2021. One of the key provisions of the Bill is linking Aadhaar with the electoral rolls.

Cash transfers in many welfare programmes, such as payment of MGNREGA wages, are done using the Aadhaar Payment Bridge System (APBS).

What are the claims made by the central government on the Aadhaar system?

The Union Government has repeatedly made claims on savings in welfare programmes due to Aadhaar. For instance, the Government continues to claim that “the estimated cumulative savings/benefits due to Aadhaar in MGNREGA till March 2021 is Rs 33,475 crores”.

The government claims that the “Savings are in terms of increasing the efficiency and reducing the delay in payments etc.”

What are the challenges associated with the Aadhaar project?

No clear methodology: A Right to Information has been filed seeking the methodology used to arrive at such savings. The government replied, for DBT Mission, “on the assumption that 10% of the wages in the year could be saved.”

Wage payment delays are persistent: An analysis of more than 18 lakh wage invoices for the first half of 2021-22 by LibTech India demonstrated that 71% of the payments were delayed (called stage 2 delays) beyond the mandated period by the Union Government.

Inefficiency in the Aadhaar system: A recently completed study of nearly 3,000 MGNREGA workers by Anjor Bhaskar and Preeti Singh shows that 57% of job cards of genuine workers were deleted in a quest to show 100% linking of Aadhaar with job cards.

Opacity surrounding APBS: The most common reason for payment failures through the APBS is called “Inactive Aadhaar.” This happens due to an error in software mapping failure with the centralised National Payments Corporation of India, the clearinghouse for APBS.

Miscredited funds: There are several cases of misdirected payments in APBS when the Aadhaar number of one person gets linked to somebody else’s bank account. These are very hard to detect, as these will appear as successful transactions on the dashboard.

Challenges in grievance redressal: As per UIDAI, its functions include “setting up of facilitation centres and grievance redressal mechanism for redressal of grievances of individuals.” However, no such mechanisms exist.

What can be done?

1. The government has to emphasise the need for a push towards constitutional propriety and accountability for technologies, 2. It is time to overhaul the nomenclature for recipients of welfare measures. Instead of calling them “beneficiaries” people should be referred to as “rights holders”, 3. Conducting pilot or independent cost-benefit analysis along with user experience of the recipients or from field-level bureaucrats.

Source: This post is based on the article ”The efficiency myth of Aadhaar linking” published in The Hindu on 30th December 2021.