With the advancement of technology in all
walks of life, it is praiseworthy that Govt. is up to providing digital
identity through Aadhaar to the people of country. It climbs a further step by
enabling the citizens to use this Aadhaar identity for the purpose of gaining
various benefits and services provided by Govt. or private agencies. If you
turn your back on the political motive, the intent behind direct cash transfer
of subsidies to the beneficiaries seems to be absolutely a commendable step
taken by Govt. In theory, this Aadhaar-enabled-service-delivery may put an end
to the problem of bogus beneficiaries and a resultant leakage of valuable
resources. Aadhaar can become a launch
pad for the final destination of direct cash transfer of subsidies to the
needy, provided the challenges of implementation and financial inclusion could
be dealt swiftly in mission mode.
The Unique Identification
Authority of India (UIDAI) is responsible for providing a 12 digit unique bio metric identification to all Indians. Poor and underprivileged may also avail social
benefits through this identity number via banking services, which most of them
are devoid of till date. But providing Aadhaar card to every beneficiary is an
uphill task in the first place. The
expedite expansion of the system of Aadhaar-card distribution in far off places
is a huge challenge, to begin with. First Aadhaar Number was issued in a remote tribal
village of Maharashtra in September, 2009. The Unique Identification Authority
have registered more than 24 crore people in the country since two years. So
far, 200 million people i.e.about 16% of India’s population have been
issued Aadhaar numbers. UIDAI has set the target of
providing Aadhaar no. to the 60 cr people in the first phase.
It means at least one of three Indians will possess a unique identification (UID)
number by next year. It is easier said than done given the procrastinating administrative
set up.
The government is rolling out Aadhaar Enabled
Service Delivery initiatives in 51 districts across the country.
Aadhaar-enabled applications will be used for making pension payments, MNREGA
payments, PDS distribution and scholarship payments, among others. The
Govt. is in tearing hurry to start cash transfers though a host of states have
a negligible presence on Aadhaar map. Asymmetric
distribution of Aadhaar in the country is a major challenge the mechanism is
facing now. A full scale nationwide implementation of Aadhaar is critical to meet
the deadlines set by Govt for direct cash transfer of subsidy. Expansion of Aadhaar
will now solely depend on the pro-activeness of state governments. It is a humongous
task on the part of the Govt. to feasibly encompass all the states in the implementation
of its ‘dream project’.
The not-so-expanded banking system poses
another risk to the full scale implementation of direct-cash-transfer
mechanism. A close to 60 percent of India’s population is un-banked. Not many
people in India yet hold a bank account, while rural branches network of banks is meager and
yet to be computerized fully. It will be tough business call for the banks to go
for a massive investment in social banking and financial inclusion amid the
pressure on margins and rising of bad debts. Banks are unwilling to bear the
cost of opening up branches in remote areas without a proper business preposition.
The moot challenge is how to strike a fine balance between banks' profits and social
responsibility. The direct cash transfer
of subsidy can never function in the absence of all pervasive banking system.
Subsidy payments and benefits under different schemes
amount to nearly Rs.3 trillion, roughly 3.5% of the gross domestic
product, according to government estimates. This can only be contained
when we a have a robust identity data of the targeted populace and a widely
spread banking network. Aadhaar has solved a major problem of giving an identity
to the faceless beneficiary but fact remains that it is still a pilot scheme. A
noteworthy reduction in subsidy shall only be possible if the Aadhaar becomes a
mission via meticulous planning and quick implementation.
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