BackCentre plans to make Aadhaar mandatory for food subsidy
The move to make Aadhaar mandatory comes despite a Supreme Court order which allowed its voluntary use for availing of benefits but said no citizen can be denied a service or subsidy
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New Delhi: In a significant step to reform the public distribution system (PDS), the centre is planning to make unique identification number Aadhaar mandatory for receiving subsidised foodgrains and simultaneously push states to move towards cashless payments by beneficiaries.
“We are very close to making Aadhaar mandatory under PDS just as it has been done in schemes like MGNREGA (employment guarantee scheme)," Preeti Sudan, food secretary told state government officials at a national conference on PDS reforms on Thursday.
“We now need to ensure that Aadhaar seeding (with ration cards) is 100% (complete). Of course, enough time will be given (to states) for this exercise," Sudan said, adding that states like Andhra Pradesh have performed well in promoting cashless transactions in PDS and other states should draw up a timeline to move towards digital payments.
The move to make Aadhaar mandatory comes despite a Supreme Court interim order in October 2015 which allowed its voluntary use for availing of benefits but said no citizen can be denied a service or subsidy for want of Aadhaar. However, use of Aadhaar for availing of subsidies got legislative backing in March last year after the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill was passed by the lower house of the Parliament.
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India’s targeted public distribution system, as per the National Food Security Act, 2013, is the largest subsidy programme in the country which costs over Rs1.4 trillion benefiting over 800 million people. Aadhaar is a 12-digit unique identification number issued by the Unique Identification Authority of India (UIDAI) after collecting biometric data of residents.
“In PDS, people without any debit or credit cards can use the Aadhaar-enabled payment system (AEPS) where Aadhaar cards are linked to bank accounts to do cashless transactions," Ajay Bhushan Pandey, CEO of UIDAI, told state officials at the conference, adding, “PDS is uniquely positioned to take the advantage of AEPS as 72% of ration cards are already linked to Aadhaar and bank accounts are also being linked."
Pandey further said there are doubts whether Aadhaar can be made mandatory for availing of benefits following the Supreme Court order, but in September, the petroleum ministry issued an order (under section 7 of the Aadhaar Act) mandating the use of Aadhaar number for availing of LPG subsidy.
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“Fifteen days ago, the rural development ministry issued a notification requiring Aadhaar for MGNREGA beneficiaries. A similar order is likely to be issued by the food ministry soon," Pandey said, adding, “if a beneficiary does not have an Aadhaar card, it is the responsibility of the government to enrol the person."
Following an interaction with states, food minister Ram Vilas Paswan told reporters that his ministry is working to ensure 100% digital payments under PDS in the wake of the “historic step" of demonetisation promoting a less-cash economy by Prime Minister Narendra Modi.
“A move towards cashless will reduce corruption," the minister said, adding, “seven states have agreed to transition to cashless PDS by March and most states have agreed to a June deadline."
Numbers from the food ministry show that so far, 72.3% of ration cards have been linked with Aadhaar numbers and 28,385 ration shops in six states are using cashless payments. Andhra Pradesh tops the list with 72% ration shops in the state going cashless followed by 40% in Gujarat.
“Mandating the use of Aadhaar is causing a lot of hardships to poor people due to authentication failures and connectivity issues," said Dipa Sinha, an activist with the Right to Food Campaign and an assistant professor at Ambedkar University, Delhi. “The push towards cashless and linking bank accounts to Aadhaar could be precursor to direct cash transfers (and do away with in kind supply of subsidised grains) as states are unwilling to move in that direction," she added.
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