An Aadhaar for Aadhaar?

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.

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