India set for biggest cash transfer plan

The stage is set for rollout of the world's largest cash transfer programme after Lok Sabha on Friday passed a bill providing statutory backing for Aadhaar. The biometric-based identity scheme is expected to make delivery of Rs 3.5 lakh crore-worth central welfare benefits and services, such as passports and driving licences, quicker and more reliable.
Using its numerical clout in Lok Sabha, the government rejected the opposition demand that the Aadhaar bill should be scrutinized by a parliamentary committee and also overuled objections to the legislation being termed a money bill -a device adopted to get around a possible veto in Rajya Sabha, where NDA lacks majority . Addressing concerns that making Aadhaar mandatory would lead to exclusion, finance minister Arun Jaitley said, “Today, you have 99 crore people who already have an Aadhaar enrolment. Ninety-seven per cent of adults in India are enrolled. The number in children is about 67%.“ He said the unique identification number programme has already resulted in savings of Rs.15,000 crore in LPG (cooking gas) subsidy.
Though the opposition raised fears that Aadhaar would lead to “mass surveillance“ by creating a massive data bank on citizens, the government sought to address privacy concerns through provisions that bar sharing of biometric information and limiting UID to establishing identity .This could help the government in the ongoing legal battle n Supreme Court.
The passage of the Aadhaar bill will help the government move ahead in operation of the JAM (Jan Dhan, Aadhaar, Mobile) governance trinity that is at the centre of PM Narendra Modi's effort to ensure leak-proof delivery of subsidies and welfare benefits and use of UID in a range of services like land registry , purchase of mobile connections, issue of passports and driving licences and banking.
The use of biometrics is seen as a surer means of establishing identity as compared to ration cards, driving licences, election IDs and even passports which are often plagued by duplication and fraud. Aadhaar's quick and relatively foolproof technology saves time and costs of banks and, once linked to bank accounts, makes transfer of benefits faster and transparent.
In the House, the opposition objected to the government's decision of presenting Aadhaar as a money bill and alleged that procedures were subverted to bypass the scrutiny of Rajya Sabha. However, their contention was rejected as Jaitley argued the focus of the bill was entirely on the mechanism to use government money for targeted subsidy and this made it a money bill. Statutory backing to Aadhaar will help the Modi government roll out its plan to expand the use of unique identification number to all welfare schemes that add up to around Rs 3.5 lakh crore which will check leaks and save anywhere between Rs.50,000 crore to Rs.70,000 crore every year.
The government's decision to fast-track the parliamentary process by terming the legislation to give legal backing to Aadhaar a money bill is also intended to earn the government political dividends as it will ensure that benefits start reaching the poor from the next financial year beginning April.
The law, once approved by the President, will allow the government to begin leveraging India's biggest identity programme in a variety of banking, tax and service operations. The identity can also be used in private businesses like mobile connection sales where often sim cards are obtained through fraudulent identities by criminals.
As the legislation links Aadhaar to disbursal of central subsidies and assistance, the parliamentary approval will accelerate the government's financial inclusion schemes much before 2019 Lok Sabha polls, giving a big push to Modi's pro-farmer, pro-poor outreach.
By the time the government faces the electorate in 2019, it will have enrolled nearly the entire population on the Aadhaar platform and this will ensure money reaches the accounts of beneficiaries besides making opening of bank accounts and obtaining documents like passports easier and quicker.
In many cases, online verification will eliminate the requirement to visit government offices.
PM Narendra Modi has visualised Aadhaar as integral to the JAM (Jan Dhan, Aadhaar, mobile governance) trinity which is intended to plug leakages and speed up delivery of central welfare schemes while also connecting beneficiaries in remote areas with the spread of mobile telephone connections. By month-end, Aadhaar would enroll around 100 crore people.
The target is to enroll all eligible residents -1.1 billion -by 2016-end, paving the way to bring all welfare schemes under the Aadhaar platform.
The statutory backing will also bolster the government's case in Supreme Court which restricted the use of Aadhaar to welfare schemes such as MGNREGA, all types of pensions schemes, employee provident fund and Jan Dhan Yojana along with PDS and LPG (cooking gas) distribution. The apex court has stopped the government from making Aadhaar mandatory to access subsidies and entitlements.
The bill passed by Lok Sabha seeks to ensure stronger legal protection of Aadhaar's biometric data by incorporating privacy provisions and restricting its sharing and use.
It also addresses issues relating to data security as raised in a public interest litigation in the Supreme Court.

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