An Aadhaar for Aadhaar?

Let me begin by recounting a conversation I overheard on a smoggy, winter evening in Delhi last week. It was at one of those events where everyone believes they are political analysts and obliged to have informed discussions on the subject of the moment. That evening it happened to be the government's announcement that it would soon be making direct cash transfers to the poor instead of supplying them with subsidised domestic gas and kerosene. This is what I overheard. 'Well, that settles it. We could now be looking at the possibility of UPA-III. What a clever little scheme they've come up with. It should be called cash-for-votes or something like that.'

Not a profound piece of political analysis but definitely on the right track. My friends in the Congress Party (I have a few left) admit privately that they are delighted with the scheme because they believe that underprivileged voters will be totally seduced into voting Congress by money pouring into newly opened bank accounts. And those who believe, mistakenly in my view, that it was MNREGA that won the Sonia-Manmohan government a second term, are now convinced that direct cash transfers will achieve even more spectacular results for them in 2014. Politically, the Prime Minister and his lady boss cannot be faulted for going full steam ahead with this utterly populist scheme but will they be doing irreparable damage to our already damaged economy?

It is my conviction that they will. Let me admit first that I have always found Nandan Nilekani's Aadhaar plans confused, expensive and purposeless. In another column long ago, I described the Unique Identity card as something that came straight out of Peepli Live. For those of you who may not have seen this excellent film, here is a short synopsis. The film is fundamentally about the futility and bizarre nature of government welfare schemes. So a destitute farmer who announces plans to commit suicide is provided a hand pump, a colour television set and other similar relief measures in a village hut that has neither water nor electricity. Could Indians living below the poverty line not end up with an Aadhaar card only to discover that biometrics do not work in villages without electricity?

After my critique of Aadhaar appeared, Nandan offered to have his staff give me a detailed presentation of the benefits of the scheme. Somehow neither of us managed to make time for this but I read about the supposed wonders of the scheme in many newspapers and magazines, including in a cover story in The Economist, but remained unconvinced about its merits. It seemed to have no direction but now, suddenly, it does. If you happen to be living in desperate poverty, you can get yourself an Aadhaar card and then if the biometrics work, you can open a bank account into which the government will be depositing your share of the cash it would otherwise have spent on diverse welfare schemes.

On the face of it, this sounds like a very good idea if you consider how badly MNREGA leaks and if you remember that nearly every mega government scheme leaks just as badly. My problem is that I believe mega government schemes are a bad idea in the first place. And, I happen to know so does the Finance Minister. I have told the story before of how I know this but it cannot be told often enough because it is such a cautionary tale. More than a decade ago, I interviewed Mr Chidambaram in a village in his constituency and a very old woman came up to him to beg for her monthly pension of Rs 100 to be made more easily available. I remember that Mr Chidambaram explained, with an exasperated look on his face, the absurdity of a Central government scheme that cost taxpayers thousands of crore rupees in order to give beneficiaries a paltry Rs 100.

Most centralised welfare schemes spend more on administration than on helping the poor lift themselves out of poverty. What is worse is that most welfare schemes serve mostly to keep poor people mired forever in poverty and eternally dependent on 'mai-baap sarkar'. Instead of spending money on these wasteful schemes we would do more to end poverty if there could be direct cash transfers to elected panchayats for them to use in building strong rural economies and infrastructure.

So forgive me for instilling a dose of gloom into the current euphoria over Aadhaar and saying as clearly as possible that in order to prove Aadhaar's usefulness we are likely to have larger and larger government welfare programmes like the ambitious food security plan. What we should be discussing instead is the end of all centralised welfare schemes on the grounds that they have failed. But, then what use would Aadhaar be to anyone?

Follow Tavleen Singh on Twitter @ tavleen_singh

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