January 2014

Bill to Escalate UIDAI as a Statutory Authority….. a Correct Move in the Right Direction

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In May 2012 this columnist insisted that UID initiative had been underestimated for its potential to bring a sea change in the way citizen-centric government service delivery usually get designed in our country. It was further opined that this may be the first and most necessary step towards a connected government. Since that last 18 months we increasingly observed that one by one important flagship government welfare schemes and financial agencies have started adopting UID as an important enabling instrument to fulfill the respective objective of the projects or the schemes.
UIDAI, created in 2009 as an Executive Authority for 5 years, had its shares of criticism like many other large government initiatives, be it for sluggish implementation, sub-optimal funding, unreliable output, confusion over redundancy with NPR activity or doubted usability. The situation was bit stabilized after the then FM’s 2011 budget speech with the declaration that UIDAI would go for 600 million enumeration in next 2-3 years and from October 2011, at least 1 million Aadhaar number would be generated per day.
After 24 months of that declaration, it may be prudent to review the current status of the UID programme output. It is obvious that 600 million target has not been achieved by this time. UIDAI may have its explanations for this slow progress on the assurance given in the Parliament but there are some important points scored by them in this intervening period. The most impacting of these is the decision of the Union Cabinet to escalate the legal status of the UIDAI to a Statutory Authority against its existing Executive Authority.
It is important to appreciate the long-standing consequence of this all important government decision. The UID project has been censured by many as a very costly proposition for a developing country of 1200 million population while some other experts doubted for any positive outcome from its benefit-cost analysis, especially in the back-drop of the constitutionally mandated National Population Register (NPR) related parallel activities wherein every Indian citizen has to be identified and some details to be recorded. In my opinion, in the excitement of branding the UID initiative as a poor duplication of NPR, most of the UIDAI critics missed the perceived primary objective of the UID project, to be used as an effective instrument to control resource leakage. For many wide-ranging government welfare schemes correct identification of millions of beneficiaries of those schemes across the country may simply save, over a few years, the leakage in scarce government resources to the extent of the amount government would be spending over a span of 6-7 years to map those beneficiaries through the UID initiative. However the steel-frame mindset of the executives in the concerned government departments did struggle in the beginning to appreciate this overwhelming potential of the UIDAI in supplementing the stated objectives of their own welfare schemes. Presumably, the mandate and possible outcome of the UIDAI did not appear with clarity before them and moreover it was felt that UIDAI did not have adequate legal backing to modify or adapt in to the implementation framework of any individual scheme initiated by the concerned government departments. Perhaps added to this uncanny worry is the fact that the entire programme is being steered by a person, with formidable authority bestowed on him, who had no exposure to government functioning for initial decades of his distinguished career!
There are other issues with the UID programme, like serious doubt raised by activists indicating possible misuse of data as well breach in privacy while political opposition started spreading around when government indicated that schemes related to Direct Benefit Transfer would necessarily use Aadhaar-linked bank accounts of the identified beneficiaries. Journey of the Aadhaar programme, since the day of the Executive Order in January 2009, has thus been a chequered ride, firstly in the form of the Bill entitled ‘National Identification Authority of India’ placed in Lok Sabha in December 2010, thereafter scrutiny by Parliament Standing Committee on Finance and then tabling of the PSC report in Lok Sabha and Rajya Sabha in December 2011, besides juxtaposing its utility against NPR. However, presumably, the recent decision of the Union Cabinet for introduction of the National Identification Authority of India Bill, 2013 in the forthcoming winter session of Parliament by the Planning Ministry, after incorporating some recommendations of the PSC, appeared to have been taken after the Supreme Court’s recent observation that Aadhaar number cannot be mandatory for government schemes, in response to a PIL against transfer of the cooking LPG subsidy through Aadhaar number-linked bank accounts. Now the proposed Bill, through the Act of Parliament, would seek to convert the existing UIDAI into a statutory authority to provide astute legal backing and also would outline the powers and functions of the Authority including other important matters like offences and penalties.
It is said that it is better late than never. And all is getting increasingly well for the UIDAI after few administrative and financial hiccups, usual for a large programme of this nature and scale. Large projects like PDS, MNREGS, IAY, JSY, ASHA, ICDS etc. have already started using Aadhaar as one of their enablers. For financial inclusion initiatives Aadhaar is fast becoming the only KYC parameter. More than 480 millions of Aadhaar numbers have been generated to date. It is learnt that benefit-cost analysis by National Institute of Public Finance and Policy revealed substantial benefits out of UID initiative with an IRR of 52.85%. Now comes the constitutional backing what is badly needed. As I wrote in May 2012, UIDAI is destined to be the most impacting transformational initiative in the governance paradigm. Let us wait and observe…time is the essence for the UID initiative.

Ashis Sanyal
Consulting Editor, egov

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