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NIPFP study says large returns expected from Aadha

Last Updated: Saturday, November 10, 2012 - 15:35

New Delhi: Integrating unique identification number project "Aadhaar" with various social sector schemes like rural employment guarantee programme and PDS, would yield rich dividends for the government, says a study.

According to cost benefit analysis study done by the National Institute of Public Finance and Policy (NIPFP), the investment on Aadhaar project would provide a return of as high as 52.85 per cent to the government.

Substantial benefits, it added, would accrue to the government by integrating Aadhaar with schemes such as PDS, MNREGS, fertiliser and LPG subsidies as well as certain housing, education and health programmes.

"After taking into account all the costs, and making modest assumptions about leakages, the study finds that the Aadhaar project would yield an internal rate of return of 52.85 percent to the Government," NIPFP said in a statement.

The NIPFP study argues that "if we were to add more programmes and expand the scope of the analysis, and also include the intangible benefits, the likely returns will be higher."

As per the projections, the benefits accruing from implementation of Aadhaar scheme would exceed the expenditure in 2015-16 and in 2020-21 the total benefit would be Rs 25,100 crore as against the expenditure of Rs 4,835 crore.

Earlier yesterday, the government has announced rolling our of the ambitious electronic Direct Cash Transfer scheme for beneficiaries of subsidised items from January next year.

The programme is expected to cover 16 states by April 2014. The scheme, which is aimed at curtailing corruption and pilferage of subsidised items, will be based on the payment platform of Aadhaar which is also to be rolled out speedily in line with it.

The 12th Plan document as approved by the Cabinet aims at financial inclusion by providing Aadhaar linked banking services to all desirous households and progressively moving to `cash transfers` for major subsidies and beneficiary payment programme.

The Unique Identification Authority of India (UIDAI) implementing the Aadhaar project, will set up a dedicated cell of technical experts in UIDAI to facilitate Aadhaar enabled Direct Cash Transfers and help individual ministries.


First Published: Saturday, November 10, 2012 - 15:35

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