uid

When I opposed Aadhaar in 2010 , I was called a BJP stooge. In 2016 I am still opposing Aadhaar for the same reasons and I am told I am a Congress die hard. No one wants to see why I oppose Aadhaar as it is too difficult. Plus Aadhaar is FREE so why not get one ? Ram Krishnaswamy

First they ignore you, then they laugh at you, then they fight you, then you win. -Mahatma Gandhi

In matters of conscience, the law of the majority has no place. Mahatma Gandhi

“The invasion of privacy is of no consequence because privacy is not a fundamental right and has no meaning under Article 21. The right to privacy is not a guaranteed under the constitution, because privacy is not a fundamental right.” Article 21 of the Indian constitution refers to the right to life and liberty -Attorney General Mukul Rohatgi

“There is merit in the complaints. You are unwittingly allowing snooping, harassment and commercial exploitation. The information about an individual obtained by the UIDAI while issuing an Aadhaar card shall not be used for any other purpose, save as above, except as may be directed by a court for the purpose of criminal investigation.” -A three judge bench headed by Justice J Chelameswar said in an interim order.

Legal scholar Usha Ramanathan describes UID as an inverse of sunshine laws like the Right to Information. While the RTI makes the state transparent to the citizen, the UID does the inverse: it makes the citizen transparent to the state, she says.

Good idea gone bad
I have written earlier that UID/Aadhaar was a poorly designed, unreliable and expensive solution to the really good idea of providing national identification for over a billion Indians. My petition contends that UID in its current form violates the right to privacy of a citizen, guaranteed under Article 21 of the Constitution. This is because sensitive biometric and demographic information of citizens are with enrolment agencies, registrars and sub-registrars who have no legal liability for any misuse of this data. This petition has opened up the larger discussion on privacy rights for Indians. The current Article 21 interpretation by the Supreme Court was done decades ago, before the advent of internet and today’s technology and all the new privacy challenges that have arisen as a consequence.
Rajeev Chandrasekhar, MP Rajya Sabha

“What is Aadhaar? There is enormous confusion. That Aadhaar will identify people who are entitled for subsidy. No. Aadhaar doesn’t determine who is eligible and who isn’t,” Jairam Ramesh

But Aadhaar has been mythologised during the previous government by its creators into some technology super force that will transform governance in a miraculous manner. I even read an article recently that compared Aadhaar to some revolution and quoted a 1930s historian, Will Durant. Rajeev Chandrasekhar, Rajya Sabha MP

“I know you will say that it is not mandatory. But, it is compulsorily mandatorily voluntary,” Jairam Ramesh, Rajya Saba April 2017


Special

Here is what the Parliament Standing Committee on Finance, which examined the draft N I A Bill said.

1. There is no feasibility study of the project]

2. The project was approved in haste

3. The system has far-reaching consequences for national security

4. The project is directionless with no clarity of purpose

5. It is built on unreliable and untested technology

6. The exercise becomes futile in case the project does not continue beyond the present number of 200 million enrolments

7. There is lack of coordination and difference of views between various departments and ministries of government on the project

Quotes

What was said before the elections:

NPR & UID aiding Aliens – Narendra Modi

"I don't agree to Nandan Nilekeni and his madcap (UID) scheme which he is trying to promote," Senior BJP Leader Yashwant Sinha, Sept 2012

"All we have to show for the hundreds of thousands of crore spent on Aadhar is a Congress ticket for Nilekani" Yashwant Sinha.(27/02/2014)

TV Mohandas Pai, former chief financial officer and head of human resources, tweeted: "selling his soul for power; made his money in the company wedded to meritocracy." Money Life Article

Nilekani’s reporting structure is unprecedented in history; he reports directly to the Prime Minister, thus bypassing all checks and balances in government - Home Minister Chidambaram

To refer to Aadhaar as an anti corruption tool despite overwhelming evidence to the contrary is mystifying. That it is now officially a Rs.50,000 Crores solution searching for an explanation is also without any doubt. -- Statement by Rajeev Chandrasekhar, MP & Member, Standing Committee on Finance

Finance minister P Chidambaram’s statement, in an exit interview to this newspaper, that Aadhaar needs to be re-thought completely is probably the last nail in its coffin. :-) Financial Express

The Rural Development Ministry headed by Jairam Ramesh created a road Block and refused to make Aadhaar mandatory for making wage payment to people enrolled under the world’s largest social security scheme NRGA unless all residents are covered.


Search This Blog

Sunday, March 27, 2016

9653 - Column: DBTL benefits could be transitory - Financial Express

Subsidy burden could rise rapidly as more households turn active consumers
By: Renu Kohli | March 23, 2016 12:27 AM

LPG-subsidy savings from shifting to direct benefits transfers (DBT) using Aadhaar has been controversial due to vastly varying estimates. The savings accrued are mainly attributable to the elimination of nearly 33.4 million ghost consumers. The ministry of petroleum and natural gas claims to have saved Rs 14,672 crore in FY15. Researcher Kieran Clarke of International Institute for Sustainable Development (IISD) figures that the sum of savings directly due to LPG DBT (DBTL) could be far less—Rs 12-14 crores in FY15 and Rs 120.9 crore in FY16. The contention here is that a larger chunk of savings came from measures taken to eliminate ghost/duplicate accounts by the oil marketing companies (OMCs) before DBT was even implemented.

Whatever be correct, it is undeniable that budgetary savings on LPG subsidy from elimination of nearly 33.4 million ghost accounts must have been significant. And the fact that another 16.5 million active consumers are no longer availing the subsidy must have further increased the sum saved. From a fiscal perspective, however, the more important point to recognise is that these savings are one-off, and future subsidy payouts could rapidly rise as more households are brought under coverage through issuing fresh gas connections. Thus, while Aadhaar-linked direct benefits transfer does exclude the possibility of a return of ghost consumers, per se it may do little or nothing to reduce or get rid of the LPG subsidy burden in the medium- to long-run.

Here is how this could pan out. Period 1 (t): LPG subsidy savings one-time only

The current estimated reductions in the LPG subsidy or savings arise from knocking off any false, fraudulent claimants who had opened numerous accounts with the oil marketing companies (OMCs). Such customers bought subsidised gas cylinders for either personal use or black-marketing. Before and after introduction of DBTL, the OMCs have been weeding out the duplicate and ghost customers; in the process, millions of previously fake gas connections have been freed.  Let us call this time period ‘t’. Savings in the subsidy bill, whatever be the amount, genuinely accrue to the government in the first round, i.e., in t. This comes from reduction in the number of beneficiaries. The freed gas connections will show up as excess or surpluses with OMCs in the current period and can potentially be sold at market prices.

LPG subsidy rises in t+1, t+2, t+3…
In the next round, or periods t+1, t+2, t+3… onwards, the surplus LPG connections that have reverted to the OMCs will be sold or given as fresh, genuine LPG connections to new consumers as there is still a large gap between demand and supply. The active consumer base size of 162.7 million is 66% of the total households (246.7 million) and the LPG-subsidy exclusion threshold has been set at much higher income level of R10 lakh per annum. Given the strong buzz around Aadhaar-based benefits being directly credited to individual bank accounts, it is reasonable to expect the demand for subsidised gas cylinders will soon begin to rise.

From the standpoint of the subsidy load, the relevant parameter is the rate at which the demand for new gas connections increases. The addition of new customers, or subsidy claimants/beneficiaries, will be determined by the pace at which information and awareness about subsidised LPG connections under DBTL spreads. Note that a supply constraint that previously restrained the expansion rate of new LPG connections, is considerably relaxed at present because of the millions of freed gas connections lying surplus with the OMCs. As new customers are added, the demand for subsidised LPG cylinders and hence, the government’s LPG subsidy payout, will once again begin to rise. Simultaneously, the one-off gains from getting rid of duplicate, false accounts will also begin to dissipate.

Government intervention could accelerate the pace
The previous scenario can be regarded as a normal rate of expansion, i.e., one that is determined as well as restricted by a standard rate of information spread and rise in household incomes. But the normal rate could accelerate due to government intervention. Schemes like Ujjwala, announced in the recent budget, could be one such example. This aims to provide LPG connections to 15 million women belonging to below poverty line (BPL) families during FY17.
What’s more, the scheme will continue for at least two more years to cover a total of 50 million BPL households. The targeted addition of these new customers will thus advance an otherwise normal expansion rate of new LPG-subsidy beneficiaries. The  LPG subsidy, in that case, may not just return to previous levels, but is well likely to exceed those simply because of accelerated inclusion of new beneficiaries into its fold as well as augmented supply conditions. In other words, the scale and scope of coverage of the LPG-subsidy—availability and the budgetary weight—will rapidly increase in the next two-three years!

Thus, while the Ujjwala-scheme has laudable objectives, viz., health and ecological benefits, from a purely fiscal (subsidy) perspective, its contribution of R1,600 for each LPG connection to BPL households can be viewed as re-routing or diversion of yesterday’s ghost accounts that are now free and lying surplus with the OMCs. Ujjwala beneficiaries will be identified in consultation with state governments and Union Territories; however, previously uncovered populations will be prioritised. This means that information spread about cooking gas subsidy from the government will accelerate. It is anybody’s guess if, at a later date, state governments start adding on as they have been doing with the popular rice-wheat schemes. The incontrovertible facts are that the LPG-subsidy payout could increase sharply in t+1, t+2, t+3…and so on, while the roots of cooking-gas subsidy culture will get more deeply entrenched.
So while Aadhaar-linked direct benefit transfers are likely to result in substantial benefits from better targeting of universal schemes like food security, DBTL in the case of LPG-subsidies is unlikely to yield any significant budgetary savings beyond the short-run. DBT or no DBT, the fiscal burden from LPG-subsidies will continue to rise for a very long period. That is, until the entire population’s needs for cooking gas are satisfied and/or exhausted – five, ten, fifteen or as many years it may take. Further, it also needs flagging that when international gas prices begin to harden the problem could multiply manifold in no time. There is no way that the cooking gas subsidy burden is going to reduce because of DBT. The only logical solution is outright elimination with a shift to market-based pricing and purchases by consumers.

The author is a New Delhi-based economist