Column: Goodbye, financial inclusion
Subhomoy Bhattacharjee
Posted online: 2011-12-12 03:35:53+05:30
Imagine the finance ministry collecting the tax and asking the home ministry to make India’s expenditure budget. The approval to the National Population Register (NPR) under the home ministry to collect the biometrics of all Indians and then asking the Planning Commission adjunct UIDAI to produce the identity numbers is just about the same, a line of argument the Standing Committee on Finance has endorsed.
No Indian ministry at the state or the Centre works on a plan where the two ends are held by two departments under two ministers. The customs department uses its own police to track tax offenders and even Lok Sabha and Rajya Sabha run their own television networks despite a public broadcaster on the same road.
For the same set of parliamentarians to talk of duplication of effort and waste of money is a bit rich when they compare the effort of the NPR and the UID to track the Indian population numbers.
There is no doubt the Manmohan Singh government goofed up (not a new phenomena) when an EGoM that was set up in December 2006 with the express mandate to reconcile the UID project with the NPR failed to do so despite meeting four times all the way to November 2008.
The group knew that the Registrar General of India was working on the NPR project to provide a multi-purpose national identity card to all Indian citizens. But that project has a different aim—it is meant primarily as a security apparatus to weed out infiltrators. The UID plan took off from a different project to provide identity to those below the poverty line.
Reconciling these two aims was possible but instead of doing that the ministers got busy with the details of getting the UID project off the ground, something better left to the concerned administrative departments. There is no other reason why the EGoM plus a committee of secretaries could not decide who will collect the data, the chief point of discord between the two agencies.
They left it vague, saying the UIDAI “may limit its activities to creation of the initial database from the electoral roll or EPIC data”. Making it worse, the ministers, including both home and finance (who are publicly airing their differences now), added that Nandan Nilekani’s team could issue instructions to agencies which will create the databases to ensure standardisation of data elements.
With that sort of wooly instructions, it was a question of time when the government would shoot itself in the foot, which it has done with aplomb this week.
Never mind the injury, the far more serious damage it has caused is to cripple the financial inclusion agenda for a long time to come. It has broken the ownership of a carefully crafted model that was to be the base of a social change agenda. UID’s Aadhar will now be one of the many development programmes that India government has often launched in the past 60 years.
To get a sense of the damage, one has to see how the two agencies looked at their task. To get enrolled in the NPR data base, an Indian needs an identity before stepping into the booth. That identity is the census record.
At every data centre, the NPR team will be accompanied by a census data collector; remember the friendly government school teachers who rang your door bell a year ago! If her data sheet does not include you, it means sending upwards an application to a government officer pleading your cause.
None of India’s poor migrant population can show their local census records. So, at a stroke, it takes them out of the count as census data is not centralised. It will happen after NPR is made, a circular process of logic, introducing a clear bias against the poorest.
This is where the UID would have scored. Recording one’s details in the register was made easy, Nilekani’s team has instead built a hard de-duplication system that weeded out double counting based on biometrics like iris scan. The parliamentarians who trashed out the report missed the wood for the trees.
The seven-stage NPR architecture says UIDAI will still be responsible for the de-duplication but the enumeration will be in the hands of the census staff. So the record will be generated by the Department of Information Technology, approved by the home ministry, manufactured in the Planning Commission and will hopefully yet find another agency to deliver it.
Worse, since the the Parliament committee has said UID’s successor, the National Identity Authority, does not need a statutory backing, it will be a brave bank manager who will take the risk of opening a bank account—frill or no frill, using a piece of paper without a legal backing. If the report is accepted, RBI will have to do a double-check on its plan to allow banks to use Aadhar as a know-your-customer norm.
The final nail is the stoppage of the UID project on the plan for cashless transfer of government payments to the poor. Aadhar came bundled with a bank account, NPR does not. The one-to-one correspondence with bank accounts that had got the financial sector excited will be over. The onus is now on bank officials to enrol the poor and then roll out the banking correspondent model on the telecom platform.
The problem with the Nilekani model is it identified a solution to a problem. Government plans are not meant to do that.
subhomoy.bhattacharjee@expressindia.com
