UID road to exclusion?

Linking NREGA payments with the UID means that workers will need to have a UID number, along with their job cards.

Published: 15th February 2012 10:46 PM  |   Last Updated: 16th May 2012 05:56 PM   |  A+A-

Ameena’s married daughter could not enrol at her local Unique Identification (UID) centre. She was told that she did not have the appropriate identification documents. She was advised to get a certificate from a Grade 1 government officer to get around this problem. But Ameena was unable to do that. Ameena’s daughter is the second wife in an unstable marriage. Ameena felt that her daughter should have at least one government ID with the husband’s name on it, should they ever need to go to court. Ameena did not give up. Months later, Ameena used her ration card that had the daughter’s name on it, to open an account at the local post office. She paid a ‘bribe’ of Rs 200 to open the account. Finally, armed with the savings account passbook her daughter was able to enrol for a UID number.

The UID is meant to give an identity to those without one. In the words of the chairman of the Unique Identification Authority of India (UIDAI) Nandan Nilekani, the purpose of the UID is “inclusivity, the purpose is a better quality of public service delivery, it’s about giving people, who have been denied identity, a chance” (Economic Times, July 2010).

Ameena’s story highlights the irony of the situation: the Unique Identification Authority of India (UIDAI) claims that it will facilitate financial inclusion as the UIDAI allows for automatically opening bank accounts at the time of enrolment. In Ameena’s case, she got an account first and then a UID number. While there are provisions for those like her daughter (eg, a certificate from a government official), those provisions are not always workable options for the poor.

Beyond inclusion in the UID database, surely ‘inclusion’ means more than possessing a valid government ID? Ultimately, it should translate into some government benefit. However, as things stand today, having a UID number alone guarantees nothing — not subsidised ration, nor National Rural Employment Guarantee Act (NREGA) employment, nor widow or old age pensions.

It is often claimed by UIDAI officials that the poor are denied benefits because they lack adequate documents. That is certainly one reason that the poor might be excluded. The bigger cause of exclusion from government benefits is that the government has ‘capped’ the coverage of many — not all important social security schemes: the Public Distribution System (PDS), social security (eg, widow and old age) pensions, Rashtriya Swasthya Bima Yojana and so on. The magical number for the cap on these schemes comes not from the proportion of population that is undernourished or suffering from ill-health, but from the proportion of the population that is living below the government’s much-criticised poverty (or, destitution) lines — Rs 28/capita per day in rural areas and Rs 32/capita per day in urban areas. These stringent caps are an important cause of exclusion from government benefits.

In the case of the PDS, the claims of greater inclusion through better targeting are questionable. There are three types of ‘bogus cards’ — ghost (eg, deceased persons), duplicates (eg, more than one card per person/family) and misclassified (non-poor classified as poor). With the help of biometrics, the UID can eliminate ghosts and duplicates, but can do nothing about misclassification (my biometrics and unique number say nothing about my economic status). In 2005, less than one-fifth (17per cent) of the richest quintile had BPL cards; on the other hand, 47-61 per cent of the poorest were excluded. Patchy data suggests that between 2-13 per cent of all cards are ghosts and duplicates. Misclassification, the main cause of poor targeting, is the result of poorly implemented BPL census surveys and the criteria used therein to identify the poor. The UID’s contribution to better targeting can be very limited. Ultimately, one cannot shy away from the need for expanding government programmes.

One should also bear in mind that the UID project, with its good intentions for greater inclusion, could end up excluding. For instance, linking NREGA payments with the UID means that workers will need to have a UID number, along with their job cards, in order to work at NREGA worksites. Currently, only about one-fifth of the population has been covered by the UIDAI. If the UID becomes compulsory for NREGA payments while the UID’s coverage remains small, there is a real danger of the rural poor being excluded from NREGA employment. For the people who participate in the programme, such disruptions can be devastating.

Even without making the UID compulsory, if NREGA payments are routed through UID-enabled systems (eg, ‘business correspondents’ or BC), our limited experience with the BC model is hardly reassuring. Andhra Pradesh which has experimented with BCs along with other modes of payment has learnt that post offices are more efficient and easier to monitor than when BCs are involved. In Haryana, minutes of a December 2011 state-level review of ‘electronic benefit transfer scheme’ chaired by the chief minister suggest that a transition to the BC model is not a simple matter — the implementation by bank-appointed BCs ‘is not satisfactory’, is ‘tantamount to denial of banking service to the senior citizens, destitute and disabled beneficiaries and their right to enjoy the benefit (of) timely remittance’. Further, ‘the schedule of visits of the BC is uncertain causing inconvenience’, BC visits are infrequent — ‘in some villages, there has been no visit at all in the last 6 months’. Other problems include ‘manual payments’, ‘not carrying out biometrics based de-duplication’, ‘non supply of transaction data for monitoring’. The ‘BC model’ comes with its own set of problems.

As Ameena’s story illustrates, there is an element of circularity in the UID’s logic of giving IDs to those who don’t have one. If providing an ID had been the raison d’etre of the UID, the enrolment drive should have started with an existing database (eg, voter IDs) incomplete and faulty though it may be; or, initial UID enrolments should have focussed entirely on the excluded. Moreover, the problem of exclusion from government programmes is not so much the result of lack of IDs as inadequate budgetary provisions and faulty procedures to identify the poor. Further, the experience of Andhra Pradesh and Haryana suggests that the transition to new systems must be made in a phased and cautious manner as transitions are rarely smooth and may come with their own (unanticipated) problems. Linking social welfare programmes with the UID — mandatory or otherwise — may inadvertently end up excluding the poor.

(Views expressed in the column are the author’s own)

Reetika Khera teaches economics at the Indian Institute of Technology, Delhi.

E-mail: reetika.khera@gmail.com

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