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The Aadhaar way

Apr 21, 2013

Amir Hamza Syed cites an example on the ground to argue for the Aadhaar enabled schemes using the Unique Identification of India (UIDAI) platform.

Opposition to cash substitution for public services has delved, to an extent, on the not-so-widely tried Aadhaar enabled system for identification.

However, work done by MicroSave, examining the implementation of the Aadhaar enabled schemes using the Unique Identification of India (UIDAI) platform shows there is much evidence to suggest that the system could, indeed, work.

MicroSave’s field work highlights the significant changes brought out by the Aadhaar enabled systems and the progress achieved in two districts, Aurangabad city in Maharashtra and East Godavari district in Andhra Pradesh.

This article is part of three in a series to showcase the work done by MicroSave with respect to the efficacy of Aadhaar.

Pension process in Aurangabad – A chronicle

In Aurangabad, pensioners comprise a substantial proportion of the population on welfare schemes provided by the central and state Government. However, ghost beneficiaries, using false identities, were common in these pension schemes. Aadhaar enabled distribution of payments was introduced in five government schemes viz. Sanjay Gandhi Niradhar Yojana, Shravan BAL Old Age pension scheme, Indira Gandhi Old Age pension scheme, Indira Gandhi National Widow pension scheme and Indira Gandhi National Disable pension scheme. The local administration wanted to eradicate these ghost beneficiaries, eliminate the middlemen and thus improve the disbursement process.

The process of thinking on improving the disbursement process coincided with UIDAI’s Aadhaar programme gaining momentum. In Aadhaar, the district administration saw an opportunity to improve the disbursement of pension payments.

In 2011, the district administration initiated Project Dilasa to disburse payments to beneficiaries of five selected social assistance programmes. The Department of Social Justice Assistance, Government of Maharashtra, signed an agreement with the Bank of India for the bank to manage the cash and deliver payments through the Aadhaar-enabled payment system. Customer service points – agent outlets to help beneficiaries receive payments upon providing the authentication/biometric details were identified, thus helping leverage the Aadhaar identity to ensure targeted delivery.

The results? By eliminating ghost beneficiaries alone, Project Dilasa helped the district administration save Rs. 7.7 crore.

So what made project Dilasa click? For one, concerted and collective action coupled with process re-engineering and the effective use of technology made it possible for the District Collector to motivate his team members and closely monitor their progress. The district administration adopted several innovative measures for implementation of AePS (Aadhaar Enabled Pension Scheme) including ddigitisation of the scheme database; ddevelopment of a web based application with involvement of the National Informatics Centre; and detailing the standard operating procedure and process guide for it to be replicated elsewhere in the country.

Using the Aadhaar identity of beneficiaries ensured in effective targeting, increased transparency and enhanced accountability while delivering payments. Savithri (whose name has been changed to protect her identity), a beneficiary of the Sanjay Gandhi Niradhar Anudhan Yojana (a scheme for destitutes – widows, disabled, divorcees under which Rs.600/person is rendered provided they are less than 65 years old, with a state domicile of more than 15 years and an annual income of uptoRs. 21000) told the MicroSave team that with AePS, the process is no longer time consuming, bureaucratic and tedious as it was earlier.

Before the implementation of AePS, Savithri had received funds in her postal savings account that had a complex multi-step process and that also involved middlemen. She had to provide documents to establish her identity, certify the death of her husband and prove her age, address and domicile each time she had to access her welfare payments. However, in the current system, she substitutes one Aadhaar card for these documents and gets the full amount without tipping any government functionaries.

Leveraging Aadhaar has helped the district administration of Aurangabad to distribute payments to genuine beneficiaries. The success of the project, however, is also due to the presence of a few unique factors. Aurangabad is urban, with a motivated administration, an excellent banking partner and a diligent business correspondent that tools the process. These advantages accelerated effective implementation, establishing beyond doubt that cash transfers to the beneficiaries can be seamlessly rendered provided these enabling factors are in place.

Aurangabad, as a pilot, presents a great case that stands testimony to this and also demonstrates that it can be replicated elsewhere in the country. Facilitating the enabling factors as well as the creation of a conducive environment for various actors to function is central for the effective implementation of AePS.

In the next part on “the Aadhaar way”, Aadhaar implementation in the much acclaimed Public Distribution System in East Godavari district is examined

Amir Hamza Syed is an economist and works with MicroSave. He is a CIM (Centre for International Migration) returning expert to India from Germany.

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