Sunday, March 6, 2011

204 - Foundations of Aadhaar - Live Mint

Even as the UID project is touted as medicine for many an ill, there is cause for concern about its effectiveness
Farm Truths | Himanshu

The unique identification number (UID) project, branded “Aadhaar”, seems to have carefully articulated itself as a panacea for all the evils that plague our public service delivery mechanism. So much so that it is now being talked about as the magic bullet for all the failures in every possible dimension of public service delivery. Last month alone saw views expressed (including in this newspaper) about the utility of UID in monitoring enrolment for the Right to Education Act, financial inclusion, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), facilitating employment search, and so on. This is beyond the greatest benefit that UID is supposed to deliver by making the below poverty line (BPL) census an integral component of the proposed Food Security Act, foolproof.

The idea of a unique identity number that can eliminate ghost beneficiaries is appealing. However, concerns remain on how effective this will be in solving the problem of leakages and misidentification, which derives its strength from the basic nature of class relations in the poorest areas, particularly villages. This is apart from the important concerns about the way privacy and security will be handled, and the possibilities of data theft and abuse.

So how will UID plug leakages? The argument is that it will help remove bogus BPL cards. True, but this is only a fraction of the problem, and there is no accurate estimate of the extent of bogus or fictitious cards. If the recent example of Tamil Nadu weeding out bogus cards is any evidence, then it is only 2%.

However, the fact that there are more than 110 million BPL households while estimates are of only 60 million households, is seen as evidence of the existence of a large number of fake cards. This is an erroneous conclusion and there is reason to believe that the number of ghost cards is in fact only a small proportion of the “excess” cards in circulation.

There is a higher number of BPL cards because many state governments (for example, Tamil Nadu, Chhattisgarh and Andhra Pradesh) have decided to include more people in the BPL net. Moreover, there is also a difference between the government’s definition of a household and ground realities. In a system where most benefits are household entitlements, there is an incentive to show a smaller household size. The result will obviously be a higher number of “households” declaring themselves eligible for benefits, than what the government stipulates based on the common kitchen definition. Given that UID is an individual attribute and not a household one, there is little it can do about this.

Further, as far as the Public Distribution System (PDS) is concerned, a large part of the leakage happens before the foodgrains reach the PDS dealer. UID has little role in these distribution and delivery systems. Another major problem with the current targeted PDS is that the beneficiaries are incorrectly identified, with large inclusion and exclusion errors. That is, many poor families are not identified as being poor. Instead, the financially well off get the benefits. Will UID help in correcting this? No, because UID will only verify if the beneficiary exists and is unique; it will not be able to identify whether she is genuinely in the BPL category. This problem can only be resolved either by universalizing essential services such as food or by designing a foolproof system for identification. UID can do neither.

Responding to privacy concerns, the UID Authority of India (UIDAI) claims it is a voluntary, not mandatory, exercise. But linking it to programme delivery for MGNREGA or PDS in effect makes it mandatory if people want to benefit from these schemes. For UID to play any role in plugging leakages in these schemes, it is essential that the entire population is covered by it. But even with universal enrolment, UID might not be able to prevent corruption and leakages at the lowest level. Take the case of a well off influential household wrongly identified as BPL. This is perfectly plausible even with UID. The beneficiary strikes a deal with the PDS dealer to show that he has actually taken the grain, using the biometric identification. But the grain is instead diverted, with the beneficiary and the dealer sharing the difference between the PDS price and market price.

Similarly, in the case of lump sum benefits such as housing subsidy, bribery is more the rule than the exception. UID can do nothing to eliminate this, but will surely add to the cost of availing the subsidy by adding a layer of middlemen who will pocket charges for authenticating a person’s uniqueness.

Clearly, while the potential for UID in reducing leakages is small (assuming everything works), it may in fact be used to deny benefits to beneficiaries. There seem to be two reasons why UIDAI is selling itself to the millions of poor in the country. First, by doing so, it is actually creating a foundation (aadhaar) of legitimacy for itself against the valid criticism of it being misused, technologically unproven and costly. Second, the UID mechanism works on external registrars, the biggest of whom are PDS and MGNREGA. At this stage, UIDAI needs to piggyback on these schemes to reach a large number of people. It is then understandably important for it to claim itself to be the foundation for public service delivery.
Source:- Livemint