Aadhaar and DBT update

Posted on March 06, 2018 by Sumita Kale

As reported in the Financial Express, "Narendra Modi government’s welfare payments: Massive 75 pct to be on DBT platform in FY 19", (March 4th, 2018) "The Centre will have managed to make direct benefit transfer (DBT) payments — 80% in cash and the balance under in-kind schemes — of around Rs 1,50,000 crore in 2017-18, almost double the amount last year and 35% of its annual spending of `4,00,000 crore on subsidies and various other doles. While this is moderate progress, three-fourths of the Centre’s welfare budget — subsidies plus other sops under the likes of job guarantee and scholarship schemes — will likely be disbursed through the DBT platform in 2018-19." With the ongoing hearing in the Supreme Court on the PILs against Aadhaar, it is important to glean out exactly where the problems lie in the use of Aadhaar when a massive DBT rollout is planned this year. 

At Indicus, we have repeatedly raised the concerns with Aadhaar. The piece, "Why Centre will have to devise a comprehensive Aadhaar Bill and not a money bill to address challenges", (Sumita Kale, Financial Express, May 26, 2017) noted the following: 

"While Aadhaar has the potential to ensure efficient public service delivery and to lower cost of transactions, a single identifier across databases can at once be a boon or a bane. The entire experience of giving a digital identity for all Indians has thrown up new challenges for us. We need more debate, inside and outside the Parliament, to work out the contours of the road that Digital India should take. The dialogue that avoids extreme positions and is open to all stakeholders can show us the way forward. 

The need for such a dialogue is because questions that have been emerging are centred around Aadhaar, but have wider ramifications. For instance, a recent study by The Centre for Internet and Security showed that some government websites, in a bid for greater transparency, had put up information on Aadhaar numbers, bank accounts, etc, not realising that such dissemination was illegal and increased the risk of identity and financial fraud.

Then there are rising concerns about data security. Specifically, for Aadhaar, clear unambiguous responsibilities need to be fixed on those who handle the data, with heavy deterrents and penalties for breach and unauthorised usage. The Aadhaar Act, 2016, fixes the primary custodianship of the identity information with the UIDAI, but is silent on the liability in case of a data breach—in fact, UIDAI is not mandated to report breaches. For misuse by agencies handling the data, the Aadhaar Act sets out a paltry `10,000 fine (`1 lakh for a company), which is considerably lower than the penalty under the Information Technology Act, 2000, which sets a transacting party compensation of up to `5 crore for mishandling ‘sensitive personal data’.

Last but not the least, is the issue of “exclusion” of beneficiaries when authentication can fail due to multiple reasons—connectivity, fingerprints not matching, fraud by agents, etc. Rather than play down such concerns, it is advisable that the government set up strict audit protocols and redressal standards across all states that ensure that beneficiaries’ grievances are heard and addressed expeditiously. Grievance redressal is not limited to Aadhaar-enabled services, yet unless we aim to build up an atmosphere of accountability and transparency at the district/village level, and Aadhaar is a good place to start, vested interests will continue to get away with leakages and excluded voices will remain unheard."

These concerns have now again been raised today in the Mint by Karthik Muralidharan, Paul Niehaus and Sandip Sukhtankar, "Balancing the costs and benefits of Aadhaar" - "The fundamental problem for service delivery in India is not Aadhaar or no Aadhaar, but the lack of systematic focus on the beneficiary experience. Aadhaar is a tool with the potential to reduce leakages and improve service delivery. But using this tool to improve the beneficiary experience (as opposed to hindering it) requires continuous effort and democratic oversight. Court guidelines to emphasize the beneficiary experience and independently measure and report it can make an important contribution."

It is absolutely essential that the government insititute a reporting and monitoring mechanism at a granular level - without  granular data, specific problems at specific locations will not be understood and the growing challenges of exclusion, rising from digitisation of payments (with or without Aadhaar), will be difficult to address honestly.

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