[Answered] Critically analyse whether the Aadhaar-based biometric authentication has been able to reduce PDS leakages or not.

Demand of the question Introduction. Contextual introduction. Body. Discuss if the Aadhaar-based biometric authentication has been able to reduce PDS leakages or not. Conclusion. Way forward.

India has been ranked at 102ndplace among 117 economies in the Global Hunger Index (GHI) 2019. To tackle India’s hunger issue government introduced National Food Security Act which provides monthly subsidised food grains through public distribution system (PDS). The PDS has historically suffered from high rates of leakage (often exceeding 50%). To tackle this, Aadhaar-based biometric authentication (ABBA) was launched.

Benefit of Aadhaar-based biometric authentication:

  1. Prevent false beneficiaries: Leakages are largely due to ghost and duplicate beneficiaries using fake identities to avail these benefits. ABBA help in reducing these ghosts and vastly improve efficiency in welfare delivery.
  2. Reduction in leakages: After the complete rollout of ABBA, the government began disbursing grain to ration shops on the basis of authenticated transactions. The researchers found that this significantly reduced the total disbursal of grain and consequently, leakages.
  3. 3.     Better Beneficiary experience: A study in Andhra Pradesh, where biometric authentication reduced leakages has reflected improved beneficiary experience due to less waiting time and timely availability of grains. 
  4. 4.     Enable individual entitlements: Linking Aadhaar to ration card holders enables the government to provide individual, rather than household entitlements. This makes allocations more transparent and also addresses the challenge of larger households receiving insufficient foodgrain.
  5. 5.     Community participation in monitoring:Communities in both rural and urban India have turned to Right to Information, as well as public activism, in order to access FPS records and monitor the functioning of ration shops. Clear accountability through Aadhaar authentication, as well as the use of electronic records, make data more available for community monitoring and strengthen the use of RTI in PDS.

Issues of Aadhaar-based biometric authentication:

  1. Minimal impact: A recently released study, based on randomised-controlled trial in Jharkhand found that ABBA by itself did not significantly change either leakage or the value of PDS goods received by households on average.
  2. Quantity fraud: The main vulnerability today, is not identity fraud (e.g. bogus cards), but quantity fraud. PDS dealers often give people less than what they are entitled to, and pocket the rest. ABBA is powerless to prevent quantity fraud.
  3. Reduced beneficiaries: For the beneficiaries who had not linked an Aadhaar to their ration cards at baseline, ABBA reduced the value of benefits received and increased the fraction of beneficiaries receiving no benefits at all due to lack of Aadhaar linking.
  4. Exclusion errors: Attempts to reduce corruption has generated exclusion errors and pain to genuine beneficiaries. 
  5. Extra burden: To claim ration worth Rs. 40, beneficiaries in the Aadhaar system incurred an additional Rs. 7 of costs than those in the old system. This is a 17% extra cost burden of the value of the benefit they were entitled to receive.

Way forward:

  1. Increasing internet penetration: The Aadhaar-based solution will be strengthened by the expanding mobile and internet connectivity across India.
  2. Cash transfer: Instead of distributing food at subsidised price, the government may transfer cash directly to the account of the poor. They may be provided with an option to choose between cash transfer and subsidised food.
  3. Universal basic income: Universal basic income to poor can help in uplifting them. It empower them economically and allow them to use money according to their needs.
  4. Using other identification methods: Other than Aadhaar, identity cards like voter can be used to link with PDS and provide benefit.

ABBA although was aimed to reduce leakages has made limited impact. It has not removed all the issues in PDS like quantity fraud. Rather, Aadhar based authentication has led to many issues and pain to the poor. Thus, other alternatives like direct cash transfer or universal basic income must be explored.

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