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LATEST NEWS UPDATES | The economics of Aadhaar -Sumit Mishra

The economics of Aadhaar -Sumit Mishra

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published Published on Jul 31, 2017   modified Modified on Jul 31, 2017
-Livemint.com

The Aadhaar project is a textbook example of how not to design and execute a public policy initiative in India

When it was first launched in 2009, Aadhaar signalled a promise to repair the corroded plumbing of India’s leaky public delivery systems. The unique biometric identity would help reduce duplicate and ghost entries in the list of beneficiaries of government schemes, and pave the way for direct benefit transfers to them eventually, the then government headed by the Congress party told us. The elimination of false claimants and a chain of government officials who administer public delivery systems would help cut down on corruption and enable the state to do more with fewer resources, we were told.

Eight years after its launch, and more than a billion Aadhaar registrations later, much of that promise remains unmet even as the project remains mired in a number of controversies. The Aadhaar project has survived a change in government but has met with a rising tide of questions from the Supreme Court, the national auditor, and from the civil society at large.

Why has the dream turned sour? A survey of the existing research on the subject suggests four key reasons. First, the Aadhaar project seems to have been launched and executed without adequate legal safeguards on the storage, usage, and distribution of data of citizens, and with limited scope for redresses. The risks of abuse have been constantly understated by policymakers. The ambiguous stance of the Unique Identification Authority of India (UIDAI), which runs Aadhaar, and the government as a whole, on privacy concerns, has not helped inspire confidence in the project.

Second, there does not seem to have been a rigorous attempt to perform an independent cost-benefit analysis either before or after the launch of the project. The results of pilot projects—which suggested several challenges—did not seem to have any impact, and there was little attempt to even fix criteria for evaluating the project. Various claims about public savings from linking Aadhaar to various beneficiary databases have emerged but as we shall see, they rest on weak evidence.

Third, the sequencing of steps required to implement an Aadhaar-based payment and direct benefit transfer (DBT) architecture did not receive the attention it deserved, leading to debilitating challenges as the project gets universalized. The issue of implementing cash transfers in a country such as India is a separate and complex issue in itself, and one that an earlier instalment of Economics Express dealt with.

Finally, the mindless expansion of Aadhaar linkage to schemes or areas where there is limited scope for leakages at a time when several problems have emerged regarding such linkages have only served to weaken the original premise of Aadhaar: That of being an effective instrument in targeting leakages. Had the linkage been restricted to a few key programmes, and the evidence regarding such linkages carefully examined and analysed, the response to the Aadhaar project would have been quite different from what it is now.

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Livemint.com, 31 July, 2017, http://www.livemint.com/Home-Page/s22gUzxOULwQxqukfcBMiM/The-economics-of-Aadhaar.html


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