On January 1, 2013, the Congress-led UPA government launched the Direct Benefits Transfer scheme, centred around the Aadhaar project begun a few years earlier. Teething troubles and implementation bottlenecks followed, the interest of the outgoing dispensation waned, and both Aadhaar and DBT were relegated to the sidelines.
Cut to 2014. With an NDA regime in power, there was speculation over the fate of the schemes, given the BJP’s past opposition to Aadhaar. Prime Minister Narendra Modi, however, surprised everyone — endorsing both at a high level meeting in early July. He asked for universal Aadhaar coverage by June 2015, that DBT be implemented in 300 districts on priority with respect to key schemes including MGNREGA and PDS, and that Aadhaar be made the basis of several new initiatives.
Modi gave Aadhaar and DBT a fresh lease of life — and yet, a year later, both seem stuck in limbo all over again. Aadhaar provides a unique 12-digit identity number based on biometrics to every resident of India, while the DBT scheme aims at eliminating middlemen and ensuring money reaches beneficiaries directly. Why have these two sound — even revolutionary — initiatives on paper failed to take off despite the backing of two successive regimes?
Aadhaar’s biggest problem is lack of legal backing. The Unique Identification Authority of India, which is in charge of the project, functions through an executive order. The National Identification Authority of India Bill that would give the necessary legal backing has remained in cold storage. The BJP-led government is finding it difficult to push the Bill, given it was originally a Congress flagship, even opposed by the BJP. And a crucial issue the government will have to resolve first is whether Aadhaar is for all residents — not just citizens — of India, given particularly the RSS fear that it will end up handing a legitimate ID to “illegal immigrants”.
The Supreme Court directive that Aadhaar can’t be made mandatory for any service — which the government can’t oppose until Aadhaar gets legal validity — has complicated the issue. As long as Aadhaar has only an enabling role without being mandatory, it remains just another ID proof, and not the single most important way to ensure services reach targeted beneficiaries, eliminating duplication and ghost beneficiaries.
This also means DBT has suffered, given the very basis of the scheme is ensuring that services reach the beneficiary through an Aadhaar-enabled payment system. While the enrolment of beneficiaries is not a big concern, seeding of their bank accounts with Aadhaar numbers is. It is not clear whose area of work that is, and there is confusion over how to identify beneficiaries whose accounts need to be seeded, and then ensure the needful is done.
The implementation of DBT has also suffered from the lack of coordination and monitoring. The UIDAI looks after the Aadhaar aspect, the Department of Financial Services (in the Ministry of Finance) the banking part, and the final implementation is with individual ministries whose schemes are under DBT. The confusion has ensured that DBT has remained more of an idea on paper, successful only in bits.
There is also no overarching body monitoring the implementation of DBT and its synergy with Aadhaar. Following the initial push, it was the PMO that was expected to play that role — which does not seem to have happened. The last high level meeting was held as far back as in September last year. Prime Minister Modi’s target of universal Aadhaar coverage by the middle of this year will not be achieved.
The so-called ‘Business Correspondent’ model, under which there must be a sufficient number of facilitators in each district to ensure the beneficiary is able to access her bank account to withdraw the benefit, is still in a nascent stage, slowing down DBT.
While the UPA may have conceived Aadhaar and DBT, the job of taking them forward effectively is of the current government. From PDS to LPG subsidy, scholarships and pensions to social welfare schemes like MGNREGA, all now rely on these two schemes. It is important to ensure that Aadhaar does not become yet another glorified ID proof in the wallet, and DBT, yet another well-intentioned idea with no impact.