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Business News/ Opinion / Online-views/  Aadhaar versus public goods

Aadhaar versus public goods

Aadhaar is exactly the kind of shiny new toy that further distracts attention from the core duty of government

Photo: Priyanka Parashar/MintPremium
Photo: Priyanka Parashar/Mint

Aadhaar, as a device for ensuring leak-proof delivery of subsidies to selected beneficiaries, diverts attention from the core function of government, which is to deliver public goods to all citizens.

Not being a historian of the use of biometric markers for identity, I do not know where or when the idea originated of covering all residents in a country, as distinct from just visitors. Perhaps Brazil. What is certain is that while Aadhaar may be the biggest and most successful such exercise, it is not the first. But I will leave the documentation of that to those better equipped than I.

The whole idea of biometric identity is that you could lose your card and forget your number and have a reader restore the number to you. We are told that inexpensive iris readers will soon be as ubiquitous as hand-held bar-code readers in grocery stores, but that day is yet to dawn. When it does, Aadhaar will become an incontrovertible identity proof that can move geographically with the holder.

But to what purpose? The idea of Aadhaar has been sold, and the expenditure on it (at least 10,000 crore) justified, on the grounds that proof of identity will enable accurate targeting of entitlement. But subsidized entitlements today for the most part are configured to a household, not to an individual. Even if/when subsidized food or fertilizer or cooking gas or kerosene is linked to an Aadhaar number, there will have to be some locational constraints on receipt, in the sense of the bank branch where the subsidy payment will be sent, or the outlet where the food is to be collected, since the authorized Aadhaar number receives the benefit on behalf of a household.

Such a locationally constrained number, with national validity but without a biometric marker, was available at no additional cost as a by-product of the 2011 population Census for all citizens. There was a National Population Register (NPR) number issued as a follow-up to the Census, but that process was stopped at some point because Aadhaar took over. The NPR, verifiable with a Census server, would not have been subject to the duplication problems that bedevil other pre-Aadhaar numbers like PAN. And it would have served perfectly well for the Jan Dhan scheme.

The rural employment guarantee is also a household entitlement, with days of employment recorded on a household job card. If benefits are paid directly into an Aadhaar-based bank account, even if it is the account of a female member, it still has to be locationally constrained. In fact, it would have been far better to convert the household job card into a smart card, and to have cash collection points with smart card readers (as is already the case in some states), since what the poor need is cash in hand, not in a bank account.

Then there is the Rashtriya Swasthya Bima Yojana health insurance scheme, where the household gets a smart card. Even if the scheme is operable with Aadhaar numbers of entitled household members, those numbers will have to be linked to the smart card in order for the scheme to function.

Yes, pension beneficiaries are individuals. And yes, linking the pension account to an Aadhaar number does weed out ghosts. But ghosts could also have been weeded out through an NPR number. Every pension requires existence certification, whereby the recipient has to show up in person at specified intervals. This requirement certainly does not go away with Aadhaar, since the number does not prove that the holder exists beyond the time at which it was last displayed by the beneficiary. We also have the Integrated Child Development Scheme, where the beneficiaries are children for the most part—but they do not have Aadhaar numbers. Their mothers do, however, and that is the only potential use for an identity that moves with the beneficiary—but it still calls for those iris readers.

Why not just be good humoured about it all, and treat Aadhaar as an ornament, with some potential uses? What I have against it is that it encrusts the functioning and duties of government as a provider of individually appropriable benefits, instead of the generalized provision of public goods and services that is the core function of government.

Sanitation and water are surely crucially important in that list of public goods. Sanitation, in the sense of networks for treatment of sewage and waste water, is classically a public good whose presence benefits all within the network, and whose absence harms all. Water is somewhat different in that private solutions can be bought, and even collective provision can in principle be charged to users in proportion to their usage.

Public health and sanitation are in the State List of the Constitution (item 6), and drainage is grouped with water supply systems in item 14. These are further listed in the Eleventh and Twelfth Schedules for transfer to local government.

By the 2011 population Census, households with potentially treatable sewage arrangements, including pit latrines unconnected to any network but covered and therefore treatable, stood at 44.06%. As for non-sewage waste water, households connected to drainage networks, either closed or open but potentially collectable and treatable, were 51.14% of the total. If half of these potentially treatable connections are assumed to be actually treated, we get 78% of sewage, and 74% of waste water released untreated into our rivers and water bodies, or into the soil.

What about drinking water? If we take the sum of treated tap water, handpumps, borewells and covered wells, we get 75% of households with access to what might generously be termed protected drinking water (ignoring groundwater contamination from poor sewerage and waste water treatment).

Unlike access to sanitation, which could reasonably be expected to have an upward trajectory over time, access to water might not go monotonically upwards over time. Even 2011 is too far back in time. We need more current data on access. Data from round four of the National Family and Health Survey (NFHS-4), conducted in 2015-16 is being dribbled out, available so far only for 15 states. NFHS defines “protected" drinking water to include even untreated tap water, and unlike the Census, the aggregate is not broken down by constituents. If untreated tap water is included within the rubric of protected water, the 2011 Census figure would ramp up from 75% to 87%.

But it remains possible to compare the NFHS estimates for 2015-16 with those from the previous round conducted in 2004-05 (NFHS-3), for 13 of the 15 states (because of the Andhra-Telengana problem). The average across these shows improvement from 82% to 86.5% over the 10 years from 2005 to 2015. These estimates are broadly in the same ball-park as the Census figures, enough to give us some measure of confidence in the NFHS sample.

The improvement in aggregate for the 13 states is promising, but four of the states actually saw a decline in household access. In two of the four, Tamil Nadu and Maharashtra, the decline was small. But in Manipur (10%) and Haryana (4%), the decline is too large to ignore.

The roiling water dispute between Haryana and Punjab over the Sutlej-Yamuna canal link is a political dispute, but plays out against the background of the decline in water access in Haryana. We don’t know whether there was a similar decline in Punjab, which is not among the 13 states for which NFHS-4 figures are available. Both Punjab and Haryana are at the high end of the ranking by Census 2011 figures of water access, but what precipitates water warfare is decline in access over time. On 19 March, an assurance was given by Haryana that water supplies to Delhi would not be choked off, but the Sutlej-Yamuna dispute will surely have knock-on effects on Delhi. The water crisis in Delhi, precipitated by the Jat agitation, brought into focus the larger issue of urban water supplies, and the extent to which these are dependent on the surrounding hinterland.

Water in India is overwhelmingly directed towards agricultural use, and of all the water-intensive crops paddy claims the largest share. What the Minimum Support Price policy for wheat and paddy has done in Punjab and Haryana is too well-known to be repeated. These were not traditionally paddy cultivating states. There are new paddy cultivation techniques that can reduce water use in paddy by half. The NITI Aayog needs to move these issues to the top of its very long list for the transformation of India.

Political discourse has been so effectively hijacked by the idea of apportionment of government benefits to designated beneficiaries, that the more fundamental Constitutional obligation to provide sanitation and drinking water to all stands egregiously neglected. Aadhaar is exactly the kind of shiny new toy that further distracts attention from the core duty of government, which does not need beneficiary identification to enable it.

Indira Rajaraman is an economist.

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Published: 01 Apr 2016, 01:02 AM IST
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