Poor Aadhaar penetration can imperil DCT rollout

By ZRG | Last Updated: Tuesday, March 19, 2013 - 17:48

Rashi Aditi Ghosh/Zee Research Group/

Using Aadhaar as the sole criterion for eligibility might delay the rollout of the ambitious Direct Cash Transfer (DCT) scheme to the poor in the country. This is in view of the rather poor integration yet of Aadhaar with pro poor government schemes.

The United Progressive Alliance (UPA) government`s dream scheme DCT rolled out from January 1, 2013 in 43 districts for 26 selected central sector and centrally sponsored schemes in a phase wise manner based on the twin pillars of Aadhaar generation and financial inclusion.

The DCT project covers schemes like Janani Suraksha Yojana, Dhanalakshmi Scheme, Indira Gandhi Matritva Sahyog Yojana (IGMSY), Maulana Azad National Fellowship and Post Matric Scholarship for SC Students.

According to finance ministry, the integration of Aadhaar into government programmes has involved only two percent of the participants during 2012-13 and its 100 per cent achievement is projected by 2018-2019. Finance ministry data, however, shows that 22.98 crore Aadhaar cards have been generated in 2012-2013 i.e. merely 18.5 percent of the total population of India.

Citing the complexity involved with the enrollment process of Aadhaar cards, Suranjan Sengupta, member of the expert group to review the methodology for estimation of poor at Planning Commission (Tendulkar committee) said, “100 per cent coverage of Aadhaar cards and its integration with other government programmes is questionable for India.”

He does not, however, have a quarrel with the idea behind the unique identity project. “Aadhaar is indeed a great idea but its enrollment procedure is complex. Aadhaar can be optimistic for urban areas but rural populace may find it difficult due to their ignorance and low literacy level,” he opined.

As per the plan, DCT projected that its implementation would help in rectifying the leakages prevailing in the major programs like the Public Distribution System (PDS) under which food subsidy is given to the poor in the country. Experts have labored over the heavy loss in the scheme due to mounting leakages.

To plug these leakages, the government proposes to roll out the cash transfer scheme for food subsidy initially to six Union Territories and willing states. Leakages have gone on unchecked and the latest data serves as a reminder of the menace. According to Consumer affairs, food and public distribution ministry in 2013 (up to January 2013), 24 complaints regarding the leakages were registered this year.

Talking about the premature implementation of DCT scheme in view of the Aadhaar, S. Indrakant, RBI Chair Professor at Hyderabad based Centre for Social Development (CSD), said, “Direct cash transfer can be a dream project for the government but it’s a premature thought in terms of its implementation.”

He recalled that earlier the food coupon scheme was introduced in Andhra Pradesh to control the leakages in the food distribution system. Initially the scheme worked appropriately but was later abandoned as it also promoted leakages due to its hierarchy of distribution.

“Similarly DCT may provide cash benefits to the needy but it also involves hierarchy and this time within the family. If the head of the family who receives the cash is an alcoholic then the money is again going to be misused,” he warned.

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First Published: Tuesday, March 19, 2013 - 17:14

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