Finace Ministry balks at Rs45,000 Crore UID Price Tag
By K.A.Badrinath, S.Ronendra Singh
June 1st 2010
PM forms inter-ministerial panel to cut cost of Nilekani project
Nandan Nilekani’s project to give a numbered identity to each of India’s billion-plus people will cost Rs 45,000 crore. And the finance ministry is not amused.
Stiff resistance from the ministry to such an extravagant demand for money has forced the prime minister to order the formation of an inter-ministerial group to find ways of paring the project’s cost. Finance secretary Ashok Chawla will head the group.
As a result, the project itself, under the Unique Identification Authority of India (UIDAI), headed by Nilekani, faces delays.
The Rs 45,000 crore cost projection was sprung on a cabinet committee on the project at a meeting last week. The cost is way above that projected only two months ago. In April, Nilekani had projected the cost of issuing a unique identity (UID) number at Rs 31 per person, based on pilot projects now under way in pockets of Andhra Pradesh, Karnataka and Bihar. But the latest projection takes the cost to between Rs 450 and Rs 500 per person – clearly a red rag to the finance ministry.
The inter-ministerial group is tasked to bring down the cost by eliminating duplication in data compilation, a prerequisite for issuing UIDs. One key cost head is the planned appointment of several registrars who will collect data.
The finance ministry’s contention is that since a huge amount is already being spent on the census exercise, now being undertaken by the Registrar General of India, data so collected may be used by UIDAI, and thus save costs.
Cuts in other expensive parts of the project, such as support infrastructure, including biometric machines, are also favoured. The group will look into all this. A final decision on cuts will, however, be taken only by the cabinet committee on the project.
The finance ministry identified the multiple data collection sources and registrars – who include oil and telecom companies in both the public and private sectors – as a major cause of the cost escalation.
A ministry official said UIDAI could be asked to rely on the comprehensive census data which would be available by February next year.
Defending the need for multiple registrars, Nilekani told Financial Chronicle that they would be utilised to “enroll the residents.” “The Registrar General of India conducting the census is also a registrar for UIDAI,” he said. He foresaw no duplication in issuing UIDs by the many registrars. “Since each Indian will have only one unique number there is no possibility of duplication. Every registrar is providing services.”
If Nilekani is finally told to bank solely on census data, the rollout of UIDs may be delayed by six months. The first numbered identities may thus not come in August, as originally planned by Nilekani. Also, facilities for biometrics and iris scans will be available only after February.
UIDAI is expected to soon float tenders for data collection and biometric checks (for face, iris and finger prints of both hands) of all Indians over 15 years of age. If the finance ministry has its way, the tenders may not be floated at all.
In this year’s budget, finance minister Pranab Mukherjee has set aside only Rs 1,900 crore for the project. Nilekani is on record that the project has already spent Rs 200 crore.
badarinath