The Aadhaar Bill 2016 and theory of ability to pay

The first UPA government was in fact demonstrated that how ‘state driven welfare’ is possible within the limited state support. MGNREGA was the best...

The Aadhaar Bill 2016 and theory of ability to pay


The first UPA government was in fact demonstrated that how ‘state driven welfare’ is possible within the limited state support. MGNREGA was the best example. It was the beginning of legitimizing minimum. The second was food security and direct cash transfer. UID was infact a project of building institutions to deliver the minimum development project of the UPA government. It was an inevitable outcome of the UPA government’s approach to development. If MGNREGA, Food Security and reducing subsidy were not initiated there should not have the UID project. The BJP has to take up UID, since they have to step into Congress Shoes. The NDA government created an image at the beginning that it was going to replace UPA’s development approach. It took two years for the NDA government to prepare themselves to realize that UPA has left nothing new for NDA to implement interms of reducing public expenditure.

UID is a not a project, it is a process, i.e. a well defined corporate process to implement price mechanism in development delivery. It is an extension of the idea of opening up state project to private entities. Conceptually UID is not different from PPP or hundred percent FDI in strategic sectors; however, unlike other projects UID got wider public support to implement it. People supported it, since it is equated to the right to subsidize. So it is quite obvious that a country with one fourth of the population poor would definitely not to go for a risking of not taking Aadhaar card. People were told that not taking Aadhaar card was risk i.e no subsidy. It was an organized project of state to put subsidy upfront and try to convince the people that it is for subsidy distribution. The UPA government did not want to have an act to implement another project. The contested question is the need for an act to reduce the subsidy. Reducing or withdrawing essential subsidies needed a parliamentary ratification. Earlier it was a private corporate company was in charge for UID and now it is replaced by an act. Now an act is being passed by the parliament to look into the various possibilities of expanding Aadhaar process and take parliament on board in its activities. The author (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 passed by Lokhsabha on March 3, 2016 indeed help the government to remove all hurdles ahead of implementing a zero subsidy regime. Now the government is free from all possible challenges in implementing the direct cash transfer scheme.

The preamble of The Aadhaar Bill, 2016 explains that, ‘to provide for, as a good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the
Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals and for matters connected therewith or incidental thereto’. So it is quite obvious from the preamble itself that it is processed and wants to revive the welfare governance, especially to reduce the subsidy. It is a larger project. The recent government advertisement on giving up, cocking gas subsidy is one among them. It is in fact a big success. It has been reported that 20 lakh people give-up cooking gas subsidy and moved to subsidy-less cylinder. However, there is no evidence to prove that those cylinders have given to rural poor households as prime minister claimed in his independent day speech. Subsidy is still an economic burden for the country and food subsidy is the one of the biggest challenge for government is concerned. See figure 1 which gives an overall trend of food subsidy. Growth rate shows a declining trend since 1991-92 and infact Adhar would make it further down since it is going to target the people again i.e ‘people having Aadhaar’. It is new ‘poor and beneficiary community’ under formation in the country.

The chapter 3 of the bill stated that the Aadhaar number or the authentication thereof shall not, by itself, confer any right of, or be proof of, citizenship or domicile in respect of an Aadhaar number holder. So it is clear from the government side that it is meant to reduce the public funding. This reflects the changing character of the state. The state becomes powerful enough to undermine its own institutional responsibilities. It is a project of target or project mode oriented state intervention. This bill legitimise the private sector involvement in welfare delivery. The Major infrastructure development project is already moved into PPP model, so this is another project in the same direction. The chapter five of the bill also explains that any central government or state government along with private agencies can be part of information gathering and processing of Aadhaar number. Enactment of the act empowered the government to include all welfare schemes under Aadhar Bill.

Challenges of Aadhaar Bill

Implementing Aadhaar is not an administrative challenge to the government; however the challenge is on defining the beneficiaries of the bill. Direct cash transfer is the only method in which government can implement it. Only a bank account is required to implement the direct cash transfer scheme. The Jandanyojana is enough to implement direct cash transfer. So why do we need Aadhaar? The bill gives an explanation that, the failure to establish identity of an individual has proved to be a major hindrance for successful implementation of these programmes ( welfare programmes (emphasis added)). This has been a grave concern for certain categories of persons, such as women, children, senior citizens, persons with disabilities, migrant unskilled and unorganised workers, and nomadic tribes. In the absence of a credible system to authenticate identity of beneficiaries, it is difficult to ensure that the subsidies, benefits and services reach to intended beneficiaries. So the sections of people referred in the bill are going to get another identity of ‘beneficiaries of minimum support’.

This section of the population needs support, however the needs and demands are different and not common. Bringing them under a common umbrella would again push them into further vulnerability. Putting them under the common category with the single support system would undermine the very democratic rights of the vulnerable communities. Once Aadhaar bill implemented, they have to depend on whatever the support extended through Aadhaar systems. And also the support systems which are not monetized would be out from the list. So the first challenge ahead of implementing Aadhaar is the monetization of even minimum welfare schemes. Quite a few like, MGNREGA, PDS and direct pension schemes could be put under Aadhaar. Health, education and drinking water etc are going to pose challenges to implement Aadhaar scheme. So such schemes have to adopt a new system of governance, i.e. to promote a cost recovery approach. Services needed to be framed according to the ability to pay of the beneficiaries and Aadhaar’s institutional support to pay the subsidy. It results an exclusion of many who are unable to be listed in the Aadhaar. Congress government was very specific to get rid of subsidies and NDA government has no new system in place instead it wanted follow the UPA regime.