#India- A ‘Cost-Benefit’ Analysis of #UID #Aadhaar #mustread


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Vol – XLVIII No. 05, February 02, 2013 | Reetika Khera

A cost-benefi t analysis by the National Institute of Public Finance and Policy of the benefits from Aadhaar integration with seven schemes throws up huge benefi ts that are based almost entirely on unrealistic assumptions. Further, the report does not take into account alternative technologies that could achieve the same or similar savings, possibly at lower cost.

Reetika Khera (reetika.khera@gmail.com) is at the Institute of Economic Growth on a ThinkTank Initiative Associate Professor Fellowship.

I would like to thank Jean Drèze for helpful feedback.

A recent study released by the National Institute of Public Finance and Policy (NIPFP) presents an innovative “cost-benefit analysis” of the Unique Identification (UID) or Aadhaar project. This is, in principle, a welcome step towards more informed discussion and greater transparency of this project. On close examination, however, the widely-publicised conclusions of this study turn out to have a fragile basis.

In a nutshell, the NIPFP report covers the potential use of Aadhaar in seven major welfare schemes and subsidies. These are the public distribution system (PDS), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, or simply NREGA), school education (including teacher salaries, mid-day meals, textbooks and uniforms), fertiliser subsidy, liquefied petroleum gas (LPG) subsidy, Indira Awaas Yojana (IAY), and payments in other schemes (pensions, Janani Suraksha Yojana, accredited social health activists and the Integrated Child Development Services). It estimates that linking these programmes to Aadhaar will lead to a “saving” of Rs 1 lakh crore over 10 years (Mathew 2012), and that after accounting for the costs of integration with Aadhaar the internal rate of return of the project will be over 50%.

Benefits from UID-Integration

The main question pertains to the benefits of integration with UID. The NIPFP report recognises that not all leakages in these programmes can be fixed by UID-integration. Only “bogus” beneficiaries, i e, ghosts (e g, a dead person whose name remains on government records) and duplicates (one person getting benefits twice), can be weeded out.1Estimates of bogus beneficiaries are available for only two of the seven programmes considered in the NIPFP report (the PDS and NREGA).

For the PDS, the report uses the leakage estimates from a report of the Planning Commission published in 2005, based on the outdated data pertaining to 1997-2001.That study estimated that 57% of PDS grain is diverted, of which, 17% was attributed to “ghost cards”. The definition of ghost cards includes (a) below the poverty line (BPL) cards that are not in possession of their owners, and (b) the excess of the total number of ration cards over that of total households (ibid: 82). It is worth-mentioning here that PDS entitlements are fixed per household. It is quite possible that in some cases several members of a joint household obtained separate ration cards for their respective nuclear families. Whether this should count as a case of “ghost” cards, as the Planning Commission report assumes, is not entirely clear. In any case, there is no reliable and up-to-date estimate of the share of bogus cards in circulation.

For NREGA the report assumes that UID integration will lead to savings of 12% of total expenditure – 7% from “automation of muster rolls” and another 5% from linking NREGA bank accounts to Aadhaar (without explaining how these would curb corruption, e g, how automation of muster rolls helps to reduce leakages). If the idea is that some people who do not work manage to have their names on the muster rolls and wages are credited to their accounts (i e, are “bogus” beneficiaries), then this fraudulent practice can continue even if muster rolls are automated.

The real protection from wage corruption in NREGA comes through bank accounts as it separates the payment agency from the implementing agency.3 With bank accounts, wage corruption can still continue in three forms: collusion (where the bank staff and NREGA functionaries collude to inflate work attendance and credit wages into accounts of people who have not worked), extortion (when an official forcibly takes money from NREGA workers after it has been withdrawn from the bank account) and deception (when a worker’s account is operated by NREGA functionaries without his or her knowledge). In the first two cases (collusion and extortion), linking accounts to UID will not help to reduce corruption. Only in cases of deception (or “identity fraud”) can biometric authentication at the stage of withdrawal of wages help.4 Estimates of the breakdown of the different types of corruption are not available.

The NIPFP report also recognises that estimates of duplicates and ghosts are not available for many schemes. What is the correct way to make assumptions on benefits of UID-integration in such cases? There is no easy answer to this, so what the NIPFP report does is either to apply the estimates of leakages due to bogus beneficiaries for one scheme to another (e g, in the case of fertiliser and LPG subsidies, the estimates applicable to the PDS are used),5 or – for the remaining schemes – to apply an arbitrary rate of 7-10%.6

Although these assumptions are termed “conservative” (Patnaik 2012), available evidence – patchy as it is – suggests otherwise. For example, an estimate of fraud in six pension schemes has been made by the Society of Social Audit Accountability and Transparency (Department of Rural Development, Government of Andhra Pradesh) for July-October 2012. Six types of corruption are documented: “dead persons”, “dual beneficiaries”, “partial payments”, “ineligible beneficiaries”, “not paid but drawn” and “other”. These social audit reports suggest that the total discrepancies in disbursement of pensions are around 2%. Discrepancies due to dead beneficiaries and dual pensions – problems that Aadhaar can fix – are a subset of this 2%. The rate assumed by the NIPFP report is 7%.

While the report admits that there are no “robust” estimates of duplicates and ghosts, it provides little justification for the rates assumed in the cost-benefit analysis. Anticipating questions about the assumptions, the anonymous authors of the NIPFP report do upload the spreadsheet with their calculations, inviting readers to “modify the assumptions and explore alternative outcomes”.7

Alternative Technologies

Biometric technology (of which Aadhaar is one variety) can help when there are bogus beneficiaries – ghosts or duplicates. Other, cheaper technologies (e g, computerisation) can also help weed out bogus cards and help plug other leakages. Tamil Nadu has a fully computerised PDS database and overall PDS leakages are very small (4% in 2009-10). In states such as Chhattisgarh, overall leakages in the PDS have fallen from 50% (in 2004-05) to 10% (in 2009-10) without any use of Aadhaar, but through computerisation and other measures (Khera 2011b). The question a cost-benefit analysis should really address is whether Aadhaar is more cost-effective than these and other alternatives, including local biometrics (used in Andhra Pradesh). This question is raised in passing, but not answered in the NIPFP report (Patnaik 2012).8

Concluding Comments

In short, NIPFP’s widely publicised cost-benefit analysis of UID is far from persuasive. It is almost entirely based on assumptions, not estimates, of the benefits of integration with Aadhaar. Where estimates (not assumptions) of bogus beneficiaries are used, they are unreliable or out of date. Further, the report does not take into account alternative technologies that could achieve the same or similar savings, possibly at lower cost.

The report also briefly considers the “costs” of integration of these schemes with Aadhaar. However, it makes no mention of the potential disruption that the integration exercise might cause. Disruption could be at the stage of integration (e g, old age pensioners may be unable to complete the required formalities) or during operations (e g, software, connectivity or biometric failures). By assuming, with touching optimism, that the UID system is reliable and seamless, the report fails to address crucial concerns that have been raised about this adventurous project.

Notes

1 For a detailed discussion on the types of corruption Aadhaar can weed out, see Khera (2011a).

2 “The reference period for the study was from 1997 to 2001 – the four-year period of the operation of TPDS. The household level information referred to the period from May to December 2001” (Planning Commission 2005: 13).

3 This practice has been in operation since 2008, except in Tamil Nadu. A few remote pockets were allowed to return to cash payments by Minister of Rural Development Jairam Ramesh in late 2011.

4 Note also that once those who were using “deception” to defraud the system, may turn to extortion and collusion once identity fraud becomes impossible.

5 The report states, “Using the estimates for PDS and MGNREGS as benchmarks, we assume that using Aadhaar-enabled system would result in a benefit of 7% of the total value of subsidies” (p 11) and “in the absence of such robust studies estimating the leakage from the system towards commercial use, we assume that use of Aadhaar would result in a benefit of 10% of the total value of the subsidy (similar to PDS)” (p 12).

6 See, for instance, p 10 where the report says, “In the absence of data on the extent of leakages that exist on account of fake and duplicate beneficiaries, we have assumed this figure to be 10% of the total expenditure incurred by the government on books and uniforms for school children”.

7 Initial attempts (twice, at a three-day interval) to download the spreadsheet revealed that the spreadsheet was password protected. Now one out of seven worksheets can be modified. The practice of posting reports without author names is also observable with the documents on NREGA and PDS on the Unique Identification Authority of India (UIDAI’s) website.

8 The cost-benefit work has been done by the MacroFinance group at NIPFP, a government-funded institution. The group has a project from UIDAI on financial inclusion which is perhaps why they focus only on UID. At the time of writing, no other paper on UID or financial inclusion was available on their website, raising the question whether the cost-benefit analysis itself was effectively sponsored by the UIDAI. Even if that is not the case, funding from the UIDAI to the MacroFinance group does create a possible conflict of interest, which would merit at least a short disclosure in the report.

References

Khera, Reetika (2011a): “The UID Project and Welfare Schemes”, Economic & Political Weekly, Volume 46, No 9, 26 February.

– (2011b): “Revival of the Public Distribution System: Evidence and Explanations”, Economic & Political Weekly, Volume 46, Nos 44-45, 5 November.

Mathew, Joe C (2012): “Big on Savings, Low on Leaks”, Business World, 24 November, available online athttp://www.businessworld.in/en/storypage/-/bw/big-on-savings-low-on-leak…

NIPFP (2012): “A Cost-Benefit Analysis of Aadhaar”, MacroFinance Group, National Institute of Public Finance and Policy, 9 November, available online at http://macrofinance.nipfp.org.in/FILES/ uid_cba_paper.pdf

Patnaik, Ila (2012): “Identify This”, The Indian Express, 3 December, available online at http://www.indianexpress.com/news/identify-this/ 1039542/

Planning Commission (2005): “Performance Evaluation of Targeted Public Distribution System”, Programme Evaluation Organisation, Planning Commission, Government of India, March, available online athttp://planningcomission.nimc.in/reports/peoreport/peo/peo_tpds.pdf

 

 

 

India’s Cash Transfers for the Poor Face Early Hurdles #UID #Aadhaar


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By AMOL SHARMA

 

DOHAKATU, India—Officials in this impoverished eastern Indian village have a message for local residents: the government wants to give you a bank account and plop money in it—now.

 

India is embarking on a dramatic shift in how it delivers welfare benefits to its hundreds of millions of poor citizens. The program, which officially begins in January and will be rolled out nationally by the end of next year, will transfer up to $58 billion in cash into the bank accounts of some 90 million households. Beneficiaries will withdraw the money using a high-tech system that verifies their identities using fingerprint scans.

 

Indians who now must get welfare payments at post offices—enduring waits of days or weeks and sometimes paying bribes to get entitlements—will get direct deposits in their personal bank accounts for everything from old-age pension to scholarships to salaries for public works projects.

 

Poor households will also get cash deposits to buy basic commodities like kerosene and cooking gas at market rates. That would replace subsidies that currently go to distributors, who are supposed to offer discounts—a system that critics say is plagued by waste and fraud.

 

The new payment approach doesn’t create any new entitlement programs for the poor. But the ruling Congress party has trumpeted it as a signature anti-poverty initiative, hoping it will prove a masterstroke ahead of national elections in 2014. Party leaders say direct deposits will ensure entitlements get to beneficiaries instead of being siphoned off by middlemen, and are touting the slogan “Your Money in Your Hands.”

 

Dohakatu is a village of subsistence potato and rice farmers in Jharkhand state. Its residents largely depend on government handouts to survive and it is among the handful of regions that participated in early trials of cash transfers and have a head-start in the rollout. People here are already getting direct cash deposits for a range of benefits.

 

“We are quite confident the cash transfer scheme will create magic in the next election,” said Shahzada Anwar, a Congress party official in Jharkhand who was in Dohakatu village recently to watch locals withdraw cash.

 

India’s huge amount of welfare spending is a major contributor to its shaky public finances. The nation’s budget deficit was 5.8% of gross domestic product in the year ended March 31. The government says the new cash deposit program can generate much-needed budget savings by eliminating corruption such as people using fake identification documents to get the same benefit twice.

 

To withdraw money under the program, beneficiaries must present a 12-digit unique identification number that every Indian is gradually being issued—220 million people have them so far. Then, they must scan their finger on a portable device known as a micro-ATM, which validates their identity in a national biometric database.

 

“No one can falsify their identity and get away with it,” Finance Minister P. Chidambaram told reporters recently. He said the efficiency gains are “incalculable.”

 

But at least in the early going, the cash transfer project will actually be a financial drag, with $1.2 billion in estimated net losses for the exchequer through March 2015, according to a recent study by the government-funded National Institute of Public Finance and Policy. The expected savings will come in the following six years and will total about $14.5 billion, or 15% of the budget deficit in the latest fiscal year, the report says.

 

Transferring cash for 29 government welfare programs will be a massive administrative undertaking. The first challenge is to open bank accounts quickly in places like Dohakatu: only 40% of India’s 1.2 billion people have bank accounts, and only 36,000 of India’s 600,000 villages even have a bank branch. There are plans to open 73,000 new “ultra small” bank branches of about 100 to 200 square feet apiece and hire one million banking employees in rural areas, according to minutes from a government committee overseeing cash transfers.

 

The micro-ATM machines depend on creaky wireless connectivity with speeds on par with the standard a decade ago in the U.S. Getting the system to work requires the intricate syncing of databases by managers of the national unique ID program, government agencies dispensing benefits, and banks. Banks have to be equipped to process a flood of new transactions in their networks. Cooking gas-related transactions alone could number 1.7 billion per year.

 

“The magnitude is just staggering,” said R.S. Sharma, director general of the Unique Identification Authority of India that runs the national “Aadhaar” identification program. “If you start transferring money into people’s accounts and don’t create a distribution network, then you are in for big trouble,” he said.

 

India took inspiration for its new approach from other big emerging economies, including Brazil, Mexico, Turkey and South Africa, which have started cash transfer programs to combat poverty and social inequality. India is targeting a far larger number of households than those countries. But its program is different because it isn’t linking benefits to specific social goals. Brazil’s program, for instance, gives 12 million low-income households about $30 a month on the condition that they show their children have an 85% school attendance rate and have received medical checkups and vaccinations.

 

About 2,000 people are participating in the Jharkhand cash transfer program now. In Dohakatu, part of Ramgarh District, locals were streaming into a ramshackle community center on a recent afternoon to withdraw cash. Among them was Riman Devi, a 51-year-old widow.

 

Her salary for digging wells and ponds as part of the government rural jobs program was deposited directly into her first-ever bank account that was created last month. Rather than go to a distant bank branch to access it, Ms. Devi approached an official and uncertainly handed over a card with her 12-digit ID number printed on it. He keyed the number into a micro-ATM. She scanned her finger to check her balance, and then again to withdraw her week’s salary: 400 rupees, or $7. Everything checked out. The official reached into his pocket, pulled out a wad of bills and paid her. (He, in turn, gets reimbursed by the government.)

 

Ms. Devi said the new system beats the old approach of getting government payments from the local post office, which often wasn’t open or would run out of money. “Sometimes it took two to three days to get the money. It was very difficult. It’s faster here,” she said. She spent some of the cash that afternoon on edible oil, spices and vegetables at a local bazaar.

 

The new way of paying has hardly solved Ms. Devi’s problems. Her only income comes from occasionally selling homemade bamboo baskets for 50 cents apiece. She doesn’t qualify for a widow’s pension because the government doesn’t classify her as below the poverty line. A local official says that is a mistake that will be corrected when the central government does a new poverty survey. Ms. Devi lives with her son in a mud-walled house with a bedroom that doubles as a rice-storage area. “Winter is coming and we don’t have warm clothes,” she said.

 

Sitting nearby in the village center was Vasudev Pahan, an 80-year-old whose family lives mainly on subsistence wheat and potato farming. Collecting his $7 monthly pension—which goes to low-income senior citizens—used to be an ordeal. He’d squeeze into a car with 14 people to go to a government office in a nearby town. Then he would wait in a line of as many as 400 people. Sometimes the office would run out of money or close before he could get his cash, so he’d have to return a few days in a row.

 

Now Mr. Pahan walks 20 minutes to the micro-ATM in the village center and withdraws cash in minutes from an account where the government has deposited his pension. “People who are getting it this way are happy,” he said.

 

A few local Congress party officials arrived at the Dohakatu center to take stock of the action and take credit for what they already proclaim as a signature achievement. Mr. Anwar, an affable, mustachioed man with a thick shag of black hair, shook hands with some villagers before plopping into a plastic chair. “This is the strongest weapon for us,” he said of the political benefits of the new program. “No one can give opposition to this.”

 

Leaders of the Bharatiya Janata Party, Congress’s main opposition in New Delhi, have criticized the Congress party for over-politicizing the initiative, but haven’t attacked the idea of the new direct payments.

 

Glitches in technology were on display in Tigra, a group of farming villages 12 miles west of Ranchi, Jharkhand’s capital. Some 39 people signed up to participate in the new program in October, but 30 of them weren’t able to take out cash from the mini-ATM despite trying several times. The main problem, authorities said, was that their new bank accounts at state-owned Bank of India weren’t “seeded” with unique ID information for beneficiaries—so it was impossible to verify people’s identities.

 

On a recent afternoon, Mahmood Alam, the local banking representative in Tigra who handles micro-ATM transactions—known as a “business correspondent”—believed the problem had been solved and was setting up to give out cash to a few dozen locals. He set up his micro-ATM machine not far from men and women threshing rice crop and goats wandering in the fields.

 

He tapped with his stylus to enter the details of Teju Gope, a 71-year-old pensioner who has a new account with Bank of India. “Place your finger for processing,” a message on the screen said. Mr. Gope swiped his finger. After a few seconds came a disappointing reply: “UID (unique ID) blocked/inactive/wrong.”

 

Mr. Alam shook his head. “It’s still not working,” he said. He said he’s optimistic about the new program but acknowledged the government’s rushed approach has resulted in some errors. “It looks to me like everything wasn’t totally ready,” he said.

 

A.K. Pathak, assistant general manager of Bank of India, said the Tigra payments snafu is an isolated incident that has been resolved. He said the Jharkhand trials overall have gone well.

 

The Jharkhand government is racing to expand the program. About 19 million of the state’s 32 million people still haven’t gone through the sign-up process to get biometric ID numbers. In Ramgarh district about 60% of the 950,000 residents don’t have unique IDs. The government is trying to prioritize people who will be getting cash transfers.

 

“This is a huge task for us—a technological leap forward is happening,” said Amitabh Kaushal, Ramgarh’s deputy commissioner, the top local bureaucrat.

 

Local officials say the use of biometric identification will weed out people who used aliases or fraudulent documents to get the same benefit twice. In one block of villages in Ramgarh, the government used to have 43,801 claimants in the rural job program as of the last official figure in 2006. But after a recent sign-up drive with biometrics, there were nearly 9,000 fewer people on the rolls. Mr. Kaushal said it isn’t clear yet whether that discrepancy is a result of fraud removal or the normal transition of some people off welfare.

 

New Delhi officials are counting on the biggest savings to come from countering fraud in the subsidy programs for commodities like kerosene and cooking gas. Critics say the current system is rife with corruption. Dealers siphon off goods and sell them on the black market. People fake their way into getting benefits they don’t deserve.

 

Food subsidies are the government’s biggest welfare expense, accounting for $13.3 billion in spending in the year ended March 31. But the government left food out of the cash transfer program, wary that it is too complex and too sensitive to do now. A survey of 1,200 households last year by the Indian Institute of Technology in Delhi found that two-thirds of respondents were strongly in favor of keeping the status quo of picking up food grains at government ration shops rather than going to stores to pay market rates.

 

The biggest limitation of the cash transfer project, critics say, is that it won’t solve the most fundamental problems in India’s targeting of welfare subsidies. Biometric screening ensures that people trying to get benefits are who they say they are—and eliminates duplicate subsidies. But if a person is being excluded from benefits now because they aren’t classified as below the poverty line, or is wrongly classified as eligible for benefits, nothing in the cash transfer program will detect that or change it.

 

Meanwhile, there are limits to the program’s ability to stamp out corruption. There is no reason a micro-ATM operator can’t ask for a kickback when giving people their money, just as a postal worker might, the critics say. “If you’re getting arm-twisted today, you’ll get arm-twisted tomorrow,” said Reetika Khera, a development specialist at the Indian Institute of Technology in Delhi.

 

From a political standpoint, putting cash into the bank accounts of the poor would seem like “manna from heaven” for the Congress-led government, says Ravi Srivastava, a development economist who has studied cash transfers. But he said it would be “incredible folly” for the government to underestimate the challenges of executing the project, especially in such a quick time frame.

 

“This whole thing has raised expectations to an unrealistic level, both within government and within the Congress party,” he said.

 

—Rajesh Roy and Krishna Pokharel contributed to this article.
Write to Amol Sharma at amol.sharma@wsj.com

 

A version of this article appeared December 27, 2012, on page A9 in the U.S. edition of The Wall Street Journal, with the headline: Tapping Benefits GetsEasier for India’s Poor.

 

 

 

Aadhaar-obsessed Indian Government should check ground reality #UID


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NOVEMBER 30, 2012, http://www.taxindiaonline.com/
By TIOL Edit Team
THE Prime Minister Dr. Manmohan Singh has put the Government in fast gear on the grandiose project for direct cash transfers (DCT) to beneficiaries of various subsidy-centric and other welfare schemes.
He exuded over-confidence the other day while addressing the first meeting of the National Committee on Direct Cash Transfers (NCDCT).
Dr. Singh stated: “Direct Cash Transfers, which are now becoming possible through the innovative use of technology and the spread of modern banking across the country, open the doors for eliminating waste, cutting down leakages and targeting beneficiaries better. We have a chance to ensure that every Rupee spent by the government is spent truly well and goes to those who truly deserve it.”
He should moderate over-confidence with ground realities, provide answers on ticklish and contentious implementation issues.
He should also direct the Government to simultaneously pursue other options to reduce subsidy leakages and thus make DCT a triple medicine o ensure that benefits reach targeted segments of population, reign in corruption in delivery system and reduce expenditure and fiscal deficit.
Take the case of fertilizer subsidy. A cost-benefit study of Aadhar project undertaken by National Institute of Public Finance and Policy (NIPFP) at the behest of Planning Commission has projected a modest saving of 7% in fertilizer subsidy scheme through DCT.
Savings many times more than estimated 7% can be achieved simply by re-engineering fertilizer subsidy mechanism by weeding out fiscal bias for certain nutrients such as nitrogen and products such as ordinary prilled urea. It would not cost Government anything to bring urea under nutrient-based subsidy scheme!
The Government can easily save a few thousand crore rupees by ordering mandatory production and use of coated urea and urea super-granules and by promoting use of nitrates-based nitrogenous fertilizers that cause lesser losses of nitrogen through air, runs-offs and seepages in the crop field.
A truly nutrient-based and product-neutral subsidy scheme, coupled with mass popularization of drip irrigation should not only cut subsidy bill by half but also ensure efficient use of irrigation water. This is the key to food security and sustainable agriculture.
UPA Government should not neglect such options and create an impression that aadhar is the magic wand for inclusive growth and expenditure reforms. It must decide whether it would cash subsidy to land owners or to the share-cropper (the actual farmer) or to both.
The Government should also disclose whether and how often it would revise cash subsidy taking into account the increase in global prices of fertilizer and raw materials and rapid depreciation of rupee.
Such concerns are equally relevant to kerosene and liquefied petroleum gas (LPG) that are primarily derived from imported crude. Would aadhar card-enabled DCT provide for automatic increase or decrease in fuel subsidies to reflect global price and forex changes?
And the acid test for the Government would be food subsidy. Would the Government automatically increase DCT/per person to reflect the regular increase in food procurement prices and the resulting rise in open market prices?
Would Aadhar mechanism have built-in mechanism to capture the inflation-caused swings in the number of potential beneficiaries especially who live on the threshold of dubious poverty line?
Yet another issue that can’t be pushed under the carpet is the urgent need to make the definition of poverty realistic and provide for inflation-indexing of poverty line.
As for implementation issues, a country bedeviled with power shortages and frequent breakdown of servers and telecom link can make aadhar-enabled electronic banking a pain in the neck for poorest of the poor.
When banking terminals at times fail in public sector banks in Delhi for hours, what is the guarantee that they would function in villages where power is supplied only for 6-8 hours as per the rural electrification norms.
There also many other challenges on the DCT road. The Government must list all concerns and disclose how it would resolve them. Credible and wholesome communication on Aadhar should replace government hand-outs to the media.
NIPFP study should have factored in all concerns and challenges before coming out with goody-goody projections.
The study claims: “We find that substantial benefits would accrue to the government by integrating Aadhaar with schemes such as PDS, MNREGS, fertiliser and LPG subsidies, as well as housing, education and health programmes. The benefits arise from the reduction in leakages that occur due to identification and authentication issues. Our analysis takes into account the costs of developing and maintaining Aadhaar, and of integrating Aadhaar with the schemes over the next ten years. Even after taking all costs into account, and making mod- est assumptions about leakages, of about 7-12 percent of the value of the transfer/subsidy, we find that the Aadhaar project would yield an internal rate of return in real terms of 52.85 percent to the government.”
The Government should commission a fresh study that should factor in all hidden and unrecognized costs of Aadhar-enabled DCT.