Aadhaar generates predictable protests

This month all Central government departments have sent out a seemingly innocuous letter to non-government organisations telling them they cannot get any more funds if they do not provide the details of how they spent the money they got earlier. It has raised an enormous bout of protest against government insensitivity. At the same time, the government has announced it will launch Aadhaar which will do away with the need for this mammoth exercise of collecting utilisation certificates from organisations that get government funds. All Indians who get a government support will now graduate to a system where the money will come to their bank account directly. Predictably this too has generated howls of protest.

The two taken together imply Aadhaar will breakdown the cash channel that runs through a large segment of the poorer income deciles. So far it was the voluntary sector that was doing the distribution of the cash. The argument against Aadhaar trotted out now is then not about the introduction of cash economy into the poor segments of the society, but by who gets to do it. What does Aadhaar do? It digitizes any government social welfare as a one-time activity. The people who will get the benefits match their bank account with their Aadhaar number, again only once. When the payments are approved (periodically), a file is sent to National Payments Corporation of India to update their bank accounts. The scale of the problem is evident from the Planning Commission national data base on NGOs. It lists 45,393 of them. But since most of them have made out an enormous list of sectors where they work on the downstream data base has expanded absurdly by repeating those names by a multiple of ten to 5,31,000.

Essentially Aadhaar is truncating the role of this sector by putting paid to this channel for transfer of cash from the government through them and forcing them to become specialised. Those which already are, face no change in their role. But again as the data set shows, the number of institutions which teach house building skills are a third of the number which teach literacy. It will be an awesome change putting at risk livelihoods built on sponging off government inefficiencies. This is driving the assorted clamour against the introduction of Aadhaar.

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