How Aadhaar legislation will help plug leakages in welfare schemes like PDS

No other project has suffered as much indifference as the one that seeks to provide portable identity to all residents of the country. Questions were raised, criticism poured in from various quarters and court cases followed. Yet, despite seven years of uncertain existence, the Unique Identification Authority of India is close to achieving a rare milestone of issuing unique identity number to one billion people.

Finally, there is going to be a much needed legislation in place to back its existence. With the passage of the legislation, which seems very likely now, the delivery of welfare schemes will get a facelift. Backed by a legislation, the government will have the option of using the Aadhaar platform to launch direct benefit transfer to intended beneficiaries for scores of welfare schemes.

What makes the Aadhaar platform suitable for direct benefit transfer? The platform has inbuilt mechanism to eliminate ghosts and duplicates. It does so by assigning a unique identity number to each resident. The identity remains unique because of the inclusion of biometrics like finger prints and iris. What is more, the platform offers benefits like portability to the beneficiaries. If I am in the list of beneficiaries of any of the government schemes, I will continue to get the benefits even if I change my place of residence.

Read more from our special coverage on "AADHAAR BILL"

Since the entire process will happen online, there is a trail of who gets what. It makes the process of auditing easier. The Aadhaar platform can easily be aligned with government databases of welfare schemes.

The most unique feature of Aadhaar is that it facilitates authentication of any transaction. Here is how it can stop leakages in the public distribution system, for instance. The PDS system, as we all know, runs with the help of a large network of nearly 500,000 fair price shops. Despite being one of the oldest welfare schemes, there are reports of a large scale diversion of items meant for the poor.

In an Aadhaar-enabled system, each and every transaction can be authenticated. Suppose a beneficiary goes to a fair price shop to buy his monthly quota of ration. If the shop has a biometric authentication device connected to the entitlement database, every transaction at the shop will end up benefiting the intended beneficiaries. All that the beneficiary has to do is to authenticate whether he indeed is the intended beneficiary with the help of unique biometrics like finger prints or iris. Once the entire transaction moves to this platform, the leakages in the system will be a thing of the past.

The beauty of the biometric-based authentication system is that it is the individual who has to participate in the process, typically at the service delivery point, let us say the PDS system, to prove his identity. His presence and his consent is required to facilitate the transaction, empowering the beneficiaries in the entire welfare delivery mechanism. There is no way such a system can be manipulated to benefit anyone else other than the intended beneficiary.

Of course the process of moving over to an Aadhaar-enabled system may have its own set of complications. But they are not going to be insurmountable. Once there is a legislation in place and a consensus to switch over to a new system, all such implementation challenges can be tackled. After all, the country badly needs a better welfare delivery mechanism and Aadhaar platform offers a chance to do that.

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