How  Aadhaar  in  schemes can be problematic

Mandatory Aadhaar-based biometric authentication has become a common feature of welfare programmes in India, including the public distribution system (PDS). This authentication is meant to plug leakages. However, if it is not designed well, it can hurt beneficiary experience, suggests research.

Karthik Muralidharan and others conducted a large-scale randomized evaluation of Aadhaar-based biometric authentication (ABBA) of Jharkhand’s PDS. As ABBA was gradually rolled out across the state, they compared the effects of ABBA in sub-districts that implemented it, first with sub-districts that had not implemented ABBA yet and were relying on the erstwhile system of using ration cards to collect subsidized food grains.

The researchers found that ABBA on its own did not significantly affect leakages. One reason for this is that though biometric authentication ensures the right beneficiary receives benefits, it does nothing to eliminate quantity fraud. Ration shop dealers can still undercut entitlements. Moreover, beneficiary transaction costs rose 17% as unsuccessful authentications resulted in multiple trips to the ration shops. Finally, beneficiary households without Aadhaar were hit as they experienced a 10% fall in benefits after ABBA.

Leakages, though, reduced after another set of reforms. 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. Yet, this did not change beneficiary experience with exclusion and reduced beneficiary benefits persisting.

The authors cited a study in Andhra Pradesh, where biometric authentication reduced leakages and improved beneficiary experience. They suggested the Jharkhand experience could be a result of programme design. They said biometric authentication can plug leakages but only if it is implemented keeping beneficiary experience in mind.

Also read: Identity Verification Standards In Welfare Programs: Experimental Evidence From India

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