Deconstructing Government claims about savings from Aadhaar

Deconstructing Government claims about savings from Aadhaar

Shri Rajendra Agrawal asked the Minister of State for Electronics and Information Technology the details pertaining to the schemes that are using Aadhaar for better delivery of services to citizens and if the government has been able to save its expenditure through implementation of Aadhar. The Minister responded by stating that 436 schemes of the Government are implementing Aadhaar based Direct Benefits Transfer, as on 27th March, 2018. Further, the Minister stated that Direct Benefit Transfer (DBT) and other Governance Reforms have led to removal of duplicate/fake beneficiaries and plugging of leakages etc. as a result of which the Government has been able to target the genuine and deserving beneficiaries. Benefits/Gains from DBT & other Governance Reforms are estimated to Rs. 82,985.83 crore upto January, 2018.

However, the aforementioned claim begs the question whether the recorded impact of Aadhaar-linked DBT due to elimination of ghost accounts or is it because of exclusion of genuine beneficiaries. According to Economic Survey, there was a sharp drop in subsidised LPG sales in the first month after the enforcement of DBT. This fall recovered substantially over the next few months, possibly as exclusion errors declined over time. Barnwal (2015) found out that even after DBT was made compulsory, not all genuine households were initially enrolled in the programme. For six months after the start of the programme, about 20% of households complied with DBT requirements. For a household to benefit from LPG subsidy under the DBT scheme, they have to open a bank account, link it with their Aadhaar number and register the same with the LPG distributor.

Further, a study conducted by NITI Aayog found that the extent of leakages in DBT through Aadhaar-seeded bank accounts has not been lower than the earlier estimates of leakages under the PDS.

The study was conducted between January 2016 and March 2017 in the three Union territories Chandigarh, Puducherry and Dadra and Nagar Haveli.

The study found that on average, one-third of respondents reported that they have not received the DBT transfers compared to the official record which showed that everybody has been transferred the amount. Of those who received benefits, almost half reported irregular payments. Only one-sixth reported receiving SMS-based information on their mobile phones, despite Aadhaar seeding. Within this one-sixth, more than 80% reported that the information was in English and not in a local language. In almost all cases, the time taken to access DBT was more than with PDS and beneficiaries spent more money for purchasing the same quantity of food than from the PDS.

The excess monetary cost in case of Chandigarh was Rs89 per household per month, Rs125 in Puducherry and Rs30 in Dadra and Nagar Haveli. The excess cost was almost one-fourth the total value of transfer from DBT. Almost two-fifth of the beneficiaries reported some grievance from the DBT system.

It is recommended to the government that it consolidates the foundation of Aadhar, so that the double team of Aadhar and DBT can be more efficient in delivering services to the general public.


Tags: Aadhaar, DBT, LPG

Maansi Verma