For COVID-19 Relief, Aadhaar Equals Exclusion

Reetika Khera and Anmol Somanchi explain why using Aadhaar for relief disbursal during COVID-19 excludes beneficiaries and recommend other modes that are less exclusionary and more effective. 

Abhijit Banerjee, in a conversation with Congress MP, Rahul Gandhi, said that if the infrastructure linking Aadhaar to disbursal of food under PDS had been in place, migrants stuck far away from homes, especially in cities where MGNREGA is not an option, would have easily been able to access food for survival.  However, Reetika Khera and Anmol Somanchi argue that Aadhaar is in fact a source of exclusion when it comes to accessing food under the PDS. It can exclude beneficiaries in three different ways - 1) Ration cards can be cancelled if the beneficiary does not have an Aadhaar card.

2) Ration cards can be rendered unusable if the beneficiary fails to link it to her Aadhaar card for some reason.

3) The biometric authentication required to access food under the Aadhaar system often fails.

Using data from official government sources, they show that the quantity of grain disbursed to PDS beneficiaries as a proportion of the total entitlement in the state is higher in states Aadhaar based biometric authentication is not used but where, instead, other means are deployed to record disbursal under PDS. For eg. a non-biometric smart card (like an ATM card) used in Tamil Nadu and a tablet that records a photo of the beneficiary against the amount of grain collected by her in Chhattisgarh.  A quick glimpse into why and how Aadhaar based distribution might be disenfranchising the needy is available in this Twitter thread that documents case studies from Jharkand from 2017: Khera and Somanchi cite studies to show that linking PDS distribution to Aadhaar has not helped stem corruption and leakage either. Further, they remind the reader that biometric attendance for government employees has been suspended for fear of the mechanism spreading infection. The same logic applies to Aadhaar based biometric verification.  In the second part of the paper, they go on to show that the use of Aadhaar for cash transfers under various schemes is also prone to malfunction. They use data to show that over the years as the use of Aadhaar for welfare benefits was enforced, the share of failed payments relative to total payments went up on average.  They believe that the estimate of failed payments associated with Aadhaar linkage to bank accounts is in fact on the lower side because the data they use does not record diverted payments (a number of beneficiaries have been receiving benefits in accounts that have been opened without their consent or knowledge and therefore have trouble accessing it).  Data also shows that failed payments are the highest when it comes to elderly beneficiaries. 

The reasons for these failures are not discussed in this paper. They vary from errors in linking the Aadhaar card to bank accounts successfully, to internet glitches, and authentication devices failing to detect fingerprints (especially amongst the elderly and manual labourers whose fingerprints tend to get eroded/fuzzy). In addition to the dangers of using Aadhaar for cash transfers during the pandemic, the writers also warn against other dangers of cash based relief - in rural areas banks can be few and far in between leading to difficulty in accessing payments and/or risk of community transmission due to overcrowding.  They also seem to think that cash transfers can lead to panic buying and hoarding, which at a time when supplies can be short, might lead to inflation and shortages. 

They recommend that the government(s) - 1) Stop using Aadhaar based biometric authentication for the distribution of food grains during the pandemic. 2) That all the ration cards that have been cancelled due to failure to link them with Aadhaar be reinstated and, for the needy who never had a ration card, a temporary non-Aadhaar based universalisation be put in place so that anyone who needs food grains at this time can easily access it from wherever they are, irrespective of whether they are classified as a PDS beneficiary in state records.  3) Cash transfers can be localised to the extent possible. For instance, cash relief could be handed out at the Panchayat level so that beneficiaries are not left to access far-away banks. This can be done at public meetings, rather than door to door, to cut the risk of cheating. You can read the detailed report with data and calculations here -

Reetika Khera and Anmol Somanchi are Associate Professor and Research Associate, respectively, at IIM Ahmedabad.

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