5397 - Aadhaar: The lies of Nilekani and Congress over biometric profiling –Part XXXI - Money Life

Aadhaar: The lies of Nilekani and Congress over biometric profiling –Part XXXI

GOPAL KRISHNA | 28/03/2014 04:57 PM |   

Has Nilekani or Congress party ever informed that its biometric Aadhaar is going to be used for surveillance and security? Also is this the reason why very few MPs, MLAs and ministers from Congress have subjected themselves to biometric profiling of Aadhaar or NPR?

On 24 March 2014, the Supreme Court’s bench of Dr Justice BS Chauhan and Justice J Chelameswar heard Mohan Parasaran, Solicitor General of India et al as petitioners and upon hearing the counsel the Court made the following order, “Issue notice. In addition to normal mode of service, dasti service, is permitted. Operation of the impugned order shall remain stayed. In the meanwhile, the present petitioner (Unique Identification Authority of India -UIDAI) is restrained from transferring any biometric information of any person who has been allotted the Aadhaar number to any other agency without his consent in writing. More so, no person shall be deprived of any service for want of Aadhaar number in case she is otherwise eligible or entitled. All the authorities are directed to modify their forms, circulars, likes so as to not compulsorily require the Aadhaar number in order to meet the requirement of the interim order passed by this Court forthwith. Tag and list the matter with main matter i.e. WP(C) No.494/2012.”

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5396 - IDEA WHOSE TIME HAS COME, MESSED UP - Daily Pioneer

IDEA WHOSE TIME HAS COME, MESSED UP

Saturday, 29 March 2014 | Ashok Malik | 

There is potential in Aadhaar. A smart politician can make it a political winner. A stupid politician could reduce it to a mess. Alas, the UPA Government did not have a smart enough politician

Earlier this week, the Supreme Court directed the Government to desist from making an Aadhaar number or identity a prerequisite for availing a public service or accessing a welfare programme. This has raised questions about the viability of the entire Aadhaar project. With Mr Nandan Nilekani, former Chairman of the Unique Identification Authority of India, joining the Congress and contesting from Bangalore (South), the Aadhaar issue has also figured in the election campaign and to that extent become more controversial. Since the UPA Government is likely to be voted out, is the game up for Aadhaar and is it going to be junked?

This is a valid question. In the heat and dust of an election, it is also a confused question. It is necessary to examine the various strands of the Aadhaar debate and pick and choose what is useful and what went wrong. Faulty implementation of the Aadhaar idea — primarily because the UPA Government did not do its homework — does not ipso facto make the idea itself a bad one.

The biggest lacuna in the Aadhaar framework is the absence of an underlying law and the fact that the UIDAI has functioned on the basis on an executive order. It is unconscionable that the UPA Government did not find the political capital or the urgency to push through such a law in the past five years. The UIDAI Bill was introduced in the Rajya Sabha in December 2010. It was referred to the Standing Committee on Finance, which presented its report in a year’s time, in December 2011, with several suggestions and recommendations.

The Government should have expedited the drafting and parliamentary passage of a revised Bill, but did not do so. It introduced a new Bill in 2013 but shrugged its shoulders when the legislation was not taken up. The Government can claim today that it did not receive cooperation from the opposition, but the broader point is the Congress itself did not deem it important to put its weight behind the UIDAI Bill. Deprived of a strong and rigorous base law, the UIDAI and Aadhaar mechanism will always lack that authentic credibility. This needs to be addressed, and addressed quickly.

However, it would not do to throw the baby out with the bathwater. Some 600 million people have been registered by UIDAI and provided their Aadhaar identities. There is capacity to issue 300 million more identities each year. As such, in about two years, every Indian can be issued a unique identity, complete with biometric data. This is no mean achievement and makes Aadhaar an excellent tool. How the tool will be used is another matter. Technology is value neutral; its deployment can be open to subjective interpretation.

Two principal objections have arisen to the Aadhaar idea. First, that it includes residents and not merely citizens; second, that it endangers the citizen’s privacy. Can one ignore these? Frankly, giving an Aadhaar identity to all residents of India — some of whom could be illegal migrants — may not be a problem if it is made clear that the Aadhaar will not be considered a valid document for getting a passport or enrolment as a voter. If it can store the resident’s biometric data — which will not change in a lifetime — it can actually work as a security enabler.

That apart, if the Aadhaar is considered a valid document — even without any supportive papers — to open a bank account or invest in a post office savings scheme or a mutual fund — then it would serve to bring many people in the informal sector into the formal financial universe. Does it really matter if a section of these investors are not citizens or are illegal migrants? Surely there are other means of detecting that?

Several years ago, as Union Minister for Home Affairs, LK Advani had proposed granting some rights and papers to non-citizen migrants, largely from Bangladesh, to incentivise them to identify themselves, open bank accounts, and enter into recognised financial transactions. This would formalise or legitimise a phenomenon that was a reality and had to be dealt with an innovative manner, without in any way taking away from the need to stop any further illegal migration. It was an enlightened plan and would keep at least part of the wages Bangladeshis earned in India in this country itself (as an investible surplus) rather than have all of these remitted. Could Aadhaar become a trigger for such an approach?

Second, there is the issue of privacy. Extreme Left intellectuals and drawing-room activists have been going on and on about a ‘big brother’ state and arguing that UIDAI is an invasion of private lives. The BJP has to be careful here. An un-nuanced attack on Aadhaar could see the party on the same side as professional naysayers who are no friends of the BJP and will be at war with it from day one, should it come to power on May 16.

Privacy protection is a noble thought but it is also a privilege of those who possess a sense of privacy and a notion of identity in the first place. To be honest, the Aadhaar identity is not for you and me. If you are reading this newspaper, chances are you have half a dozen identity cards — from a driving license to a PAN card to a voter card — in your wallet, not to speak of a house purchase agreement or rent lease. Many common citizens are simply not as fortunate.

A year ago, I went from bank to bank seeking to open an account for the domestic help who works at our residence. She is a migrant from Darjeeling, has lived in Delhi for a decade, and had some but not all the documents the banks demanded. It was a harrowing experience and led to refusal from bank after bank. The Aadhaar is meant for her. If it can be made the one identity — complete with biometric data that can be accessed by multiple agencies using an IT network, after seeking the individual’s concurrence and adhering to appropriate data protection — that will allow her to open a bank account or invest in Government bonds or get a voucher for a free course at a public-funded skills institution, it will change not just her life but that of millions.

That is the potential of the Aadhaar. A smart politician can make it a political winner. A stupid politician could reduce to it a mess.

5395 - We'll throw Aadhaar into the dustbin: H N Ananth Kumar - BUSINESS STANDARD

We'll throw Aadhaar into the dustbin: H N Ananth Kumar

Interview with BJP's national general-secretary

Mahesh Kulkarni & Bibhu Ranjan Mishra  |  Bangalore  March 29, 2014 Last Updated at 00:21 IST

Bharatiya Janata Party’s national general-secretary H N Ananth Kumar, trying for a record sixth continuous term from the Bangalore South constituency, is in a tough battle against Congress candidate Nandan Nilekani. In an interview with Mahesh Kulkarni & Bibhu Ranjan Mishra, he says his basic opposition to Aadhaar is that citizenship of a country should be by determination and not by declaration. Edited excerpts:

What is the mood among voters this time?

There is a tremendous wave in favour of BJP in Bangalore. The BJP is going to win not only in all the three seats in Bangalore but it may also provide surprise results outside Bangalore in places like Chikkaballapur and Kolar.

In 2009 elections, the BJP was ruling in Karnataka and you won 19 seats. Now, your party is not in power. Do you think it will affect your chances of retaining as many seats?

First you need to understand that in Karnataka people have definitely voted differently for the Vidhan Sabha and the Lok Sabha. In 1991, when we first won four seats, we only had four MLAs and that was the biggest ever swing in the annals of Indian democratic history. From 2.6% in 1989, we became 28.6%. Same thing happened in 1996. We got six seats and in 1998 that became 16 with Lok Shakti of Ramakrishna Hegde. I think, on the Narendra Modi wave it will be 20 plus seats.

There is a tremendous wave of Modi this time. There is a huge anti-Congress wave similar to 1977. This time it will be a full time BJP government under Narendra Modi. He has become the icon.

How many seats do you think BJP will win at the all India level?

At the all India level, BJP will win more than 272 seats on its own and form the government.

What is the basis for your confidence?

What is the biggest debate going on in India today? The biggest debate is two-fold. The choice is between good governance, bad governance and no governance. People feel good governance means Narendra Modi, bad governance means Manmohan Singh and no governance means Arvind Kejriwal. Therefore, the choice is good governance and secondly, when the choice is Narendra Modi for good governance, why we should not give him a clear mandate.

The enlightened citizens of this country have seen the 1989 experiment, 1996 experiment and 1998 experiment of the 24 party coalition government of Atal Behari Vajpayee. They know the limitations of each of these experiments and therefore they feel this time we will give a clear mandate to Narendra Modi.

So, you will not require the help of NDA partners in forming the government?

I have clarified this earlier. In my earlier press conference in Delhi as the general secretary of BJP, I said that BJP, despite attaining clear majority, will form the government with the help of NDA partners. Further, we are for the extension of NDA and we want further extension of NDA because we realise that this country cannot be governed only by majority, it can be governed by consensus or near consensus.

In this election, what do you think will be Karnataka’s contribution to the BJP in forming the government?

There are three happening states in the country in this election. One is Uttar Pradesh, another is Bihar and third is Karnataka. Therefore, these three states will make the BJP government. In UP, if you are winning 40+ seats, 20+ seats each in Bihar and Karnataka, it will make our government.

In Karnataka, you took some hasty and desperate moves like inducting Pramod Mutalik and dropped him immediately? Do you think voters will still vote for the party?

I have already said that was a mistake and within two hours that mistake was corrected. Mistakes do happen. Nobody can afford such mistakes, but when mistakes happen, whether you correct it or not.

But, Mutalik is contesting against your candidate in Dharwad?

We are in democracy. Anybody can contest from anywhere. In 1991, Prof Venkatagiri Gowda, the noted economist, contested and became MP from BJP in Bangalore South. In 1996, he was removed from BJP for his anti-party activities and he contested as an independent. He got only 3,000 votes. Therefore, people are going to vote for BJP and against BJP. They are not going to waste their votes.

Your opponent Nilekani says the people of Bangalore South are looking for a change..

There is a tremendous amount of fatigue against the Congress. The congress candidate should understand that this is not a municipal election, this is national election. People are not going to vote for municipality issues and they are going to vote for national issues like price rise, governance, and national security among others.

I entirely agree with him that people are looking for change at the national level. They want to throw out the Congress government at the Centre. There is a tremendous amount of fatigue over price rise, bad governance for the last 10 years of Manmohan Singh government, about economic recession, stagnation, inflation and about insecurity on the borders and inside the borders and at the first ever opportune moment, they are going to pack this Congress government at the centre. When they are packing the entire party that includes individual candidates also.

What are the main issues in the high-profile constituency?

I have already explained, people look at national issues. The people are also questioning Nilekani's new found love for Bangalore in the last 18 days. He came to Bangalore 18 days ago and started loving Bangalore. But here is an MP who has been serving with great commitment for 18 years. Ananth Kumar has been tried, tested and trusted five times. People of this constituency know me as their family member. In each locality, mohalla and gulli, I can call many people by their names. I can call not less than 10,000 people by their first name.

While you claim that the internal democracy is stronger in BJP than other parties, why is the information going out through social media?

We are not a political party like the Congress or family ruled parties like Mulayam Singh Yadav's or Lalu Prasad Yadav’s parties. In BJP,  there is a large amount of internal debate and discussion. Because of this free atmosphere, sometimes, this seeps into social media also. You are asking about party’s internal debate. For example, in Karnataka on March 8, we cleared 20 seats with almost no discussion. But for the remaining 8 parliamentary segments, we took three weeks. It is natural for any political party. Because, where leadership is clear there you can easily do it. And where it is not clear and where there are more than one contestant or claimants, you need to pursue and convince them.

In Bangalore South you are facing an IT industry veteran as your opponent in this election. He claims to have created thousands of jobs when he was in IT industry. Could you explain what was your contribution to the IT industry?

First of all, the entire electronics city came during our period. Number two, you see that major roads connecting the main city to the electronic city was started during Vajapayee’s tenure and completed by the BJP government in the state. It is well known to the world that if there is one government which has provided wherewithal to the IT industry with tele revolution, power reforms and all the sops for software and hardware companies, it is the A B Vajapayee government. I can give you a list of what all the NDA government did between 1999 and 2004.

What are your achievements as MP in the last five terms and what is your contribution to Bangalore South voters?

First of all, I brought Kempegowda international airport to Bangalore. We acquired 3,500 acres land and formed a special purpose vehicle to implement the project. We went for global tendering and laid the foundation stone to the first ever Greenfield international airport for Bangalore.

Secondly, I also brought, as a minister for urban development, the Bangalore Metro project. I appointed Shreedharan and DMRC as the consultant for Bangalore Metro and I gave the money to prepare the DPR, conducted soil test and also had a tie up with JICA for equity and finance.

Thirdly, the Bangalore Mahanagar Palike (BMP) was bleeding in 2001, they were not having money for projects. HUDCO was under me and I gave Rs 10,000 crore credit line to state government and Rs 1,000 crore to BMP for creation of more than 250 parks and 57 water reservoirs and tanks. A number of flyovers, underpasses and grade separators were built. We also provided money for construction of 100 Nirmal Shouchalayas (toilets).

Fourthly, I also gave Bangalore two more things, which are on the anvil. Like Mumbai, Bangalore should have a suburban rail. It will have four radials towards -- Chennai, Hyderabad, Pune-Mumbai and Mysore.

We commissioned RITES for conducting detailed project report, which was approved by BJP government in its last budget before 2013 assembly elections. We are the first ever state, which has proposed it to the Centre under the 50:50 joint venture under K-RIDE (Karnataka Railway Infrastructure Development Enterprise), which is a special purpose vehicle created only between government of Karnataka and government of India. That proposal is pending before the Central government.

My recent proposal for Bangalore city is setting up a dedicated power plant at Bidadi with a capacity of 1,250 Mw. I persuaded GAIL to lay the gas pipeline, which is already ready and the DPR is ready for the power project. The government would be floating global tenders very soon for the project.

I have also brought additional 500 MLD water through the Cauvery water 4th stage project for Bangalore despite Jayalalitha’s opposition. I provided Rs 800 crore through HUDCO for the project.

If NDA returns to power, what are your programmes for Bangalore in the first 100 days?

I will take up three projects like, suburban rail, Bidadi power plant and thirdly, rejuvenation of tanks and a metro rail link to international airport.

5394 - Supreme courts Ruling on Aadhaar dated 24th March 2014

Supreme courts Ruling on Aadhaar dated 24th March 2014

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5393 - Leave Aadhaar, UIDAI to the Next Government - New Indian Express

Leave Aadhaar, UIDAI to the Next Government

By The New Indian Express

Published: 26th March 2014 06:00 AM

Last Updated: 26th March 2014 01:45 AM

The Supreme Court’s order delinking the Aadhaar card from government schemes and subsidies has knocked the bottom out of one of the UPA government’s important programmes. The court has also asked the Unique Identification Authority of India (UIDAI) not to share biometric and other personal information it has gathered with anyone without the permission of the person concerned. Together they constitute a body blow to the government that spent a colossal sum to make and distribute Aadhaar cards. The unique identification scheme was a fancy idea to provide every citizen a number so that it would serve a variety of purposes from identification to entitlement.

The authority had claimed that the identity cards could not be duplicated as they contained biometric details of the persons concerned. When the Aadhaar card was made mandatory for certain entitlements like subsidy on cooking gas cylinders, it was revealed how ill-prepared the government was. The implementation created utter confusion from which there was no escape. It was a blessing in disguise that the apex court intervened and virtually de-legitimised the card. The case of the unique identification number has been proved worse. The government forgot that building a system that could search latent fingerprints wasn’t within the constitutional and legal mandate and scope of UIDAI. Media organisations have of late exposed how officials in charge of UIDAI have been selling the cards for money. They did not even insist on biometric details to produce the cards for those who could pay. Worse, even foreign nationals like Nepalis and Bangladeshis were able to get unique identity cards made in their names. Could anything be more farcical than this?

All this shows that both the Aadhaar and the unique identity card schemes have flopped. The government is mainly to blame, as it had not given adequate thought about their implementation before they were launched. Now it is too late for the UPA government to do anything about them. It should keep the programmes in hold so that the next government can take a call on them.

5392 - Nandan Nilekani’s brigade for people like them - Hindustan Times

Nandan Nilekani’s brigade for people like them

Sudipto Mondol, Hindustan Times  Bengaluru, March 28, 2014

First Published: 00:47 IST(28/3/2014) | Last Updated: 00:52 IST(28/3/2014)

It’s easy to spot the members of the Nilekani core group, called Together With Nandan (TWN) — a 1,500-member strong band of volunteers raised in January this year — in the sea of Congress workers. 

Dressed in ethnic wear but anglicised to their toes, the tech-savvy and largely upper-caste young men and women don’t fit the image of campaigner, for sure. What’s more, many of them speak only English, while most Congress workers speak only Kannada and some faltering Hindi.

It’s visually apparent that politics is not their occupation. Many of them don’t even know where the Congress office is. “We are here for Nandan. We don’t really engage with the Congress,” said a TWN member.

The group’s entire poll pitch is centred on Nilekani and his role in building Infosys, the Bangalore Agenda Task Force and UIDAI. The TWN website doesn’t even sport the Congress’ party symbol.

So, what made them come together with the Congress without being too close? “The idea is to run two parallel campaigns. Our task is to maintain this distance without embarrassing or alienating the average worker,” said a close Nilekani confidant.

He said far from being a whim ending up as a blunder, TWN is part of a calculated strategy to defeat the BJP heavyweight, Ananth Kumar.

The group has a specific task: Increase the voter turnout in Bangalore South, where it’s been traditionally low. The opening line on their website is: “It’s time to cast our vote.” And it goes on to ask, “Are you registered to vote? Is your voter information updated? Do you know your polling station?”

They’re asking sharp enough questions to make the apolitical elite of Bangalore South sit up and take notice. The reason: “Ananth Kumar has thrived because of low voter turnout in each of the last five elections in Bangalore South.”

A TWN member said, “Our margin of defeat in 2009 was just 37,000. Our target is to get at least one lakh new voters this time.”

But Bangalore South is far from a gated community of the rich. Slums, such as Devaraj Urs Colony, Ragigudda, Ejipura, Rajendra Nagar and SG Palya house thousands of voters. And it’s no secret that they are the ones who actually care about elections. “We got tremendous support from these areas in 2009. But it is the elite who stayed away,” said one campaigner, while another confessed: “Most people in the lower income neighbourhoods never heard of Nandan. We are hoping that Congress workers will campaign hard in these areas.”

On paper, the BJP and the Congress appear even, with four MLAs each in the parliament constituency. But while the BJP MLAs started campaigning for Ananth Kumar months ago, the four Congress MLAs joined Nilekani’s bandwagon only a fortnight ago.

The first time they appeared together in public was when Nilekani filed his nomination last Friday. “They had to wait till Nandan formally joined the Congress. And Nandan did not want to join until he delivered on his promise of issuing 600 million Aadhar cards,” said a volunteer.

5391 - ‘Aadhaar, telcos can be used to short-circuit FI process’ - Millenium Post

OPINION ‘Aadhaar, telcos can be used to short-circuit FI process’ 27 March 2014, New Delhi, Srishti Pandey Nachiket Mor, head of the committee on comprehensive financial services for small businesses and low income households (CCFS) which submitted its report in January this year, talks to Srishti Pandey on financial inclusion India is a poor country and will remain one for a long time, says Nachiket Mor, a member of the RBI’s central board of directors and head of the committee on comprehensive financial services for small businesses and low income households (CCFS) which submitted its report in January this year. In a candid interview, Mor argues why it is important for banks to work around different economic considerations, how Aadhaar and telcos can be used to clear the logjam between banks and customers, and why one good idea is just not enough to satiate the needs of the vast Indian market.  Edited excerpts: RBI deputy governor K C Chakrabarty aims to provide bank access to every household by 2016, while you say that every adult individual should have a bank account. Is he being overly conservative or are you being too ambitious? I think what we both say makes a lot of sense. Clearly, the unit of interaction is the household. The presumption is that the head of the household will be the person who will borrow money, and do other banking activities. The opportunity that we have today from which we can benefit is that there are almost a billion mobile phone connections in the country. All the telcos have fulfilled the know-your-customer (KYC) requirements in some form or the other. In fact, RBI itself requires no KYC for accounts below Rs 50,000. Also, Aadhaar is doing a lot of work in terms of collection of data. So we suggested that this data can be used to create an account in the cloud right away by partnering with the UIDAI. And if Aadhaar is not working then we can look at mobile portals because these mobile phone companies have already got 700-800 million customers and so one can even argue that if we go in that direction, 2016 is too long. If on the other hand banks continue to say that they want a formal structure for reaching out to the unbanked areas then that could even take another 30 years. What Chakrabarty has in mind is comprehensive inclusion and that even we agree will take longer because it is not clear that everyone wants credit and so banks will have to go the old way to give credit. Our targets are more around opening accounts and payments which can move quickly. You have based your 2016 target on the success of Aadhaar but the UID initiative is facing multiple challenges. The UIDAI are at a run-rate of about 10 lakh customers per day and by May they are likely to complete 70 crore. So if they are generating a million numbers a day then by 300 days they should get done. But generating the Aadhaar number is not enough. A customer will still have to go to a bank to activate an account. What we are trying to do through this mechanism is to break the logjam of who goes to whom first – whether it is the customer going to the bank or vice versa. It is about short-circuiting the process. Leveraging Aadhaar or telcos is an easy and low-cost pathway.     Your panel is strongly in favour of leveraging mobile technology but what about this turf war between telcos and banks in terms of sharing customers, revenue model, etc? In one of the recommendations we argue that the current strategy which we follow is perhaps the riskiest. We have created Airtel Money as a PPI [prepaid payment issuers] where we have told them that they cannot get a cash-out. Whatever money they collect has to be put into an escrow account. We argue that for a customer it creates risk because once I open an account with Airtel Money and later decide to close it, I will not be able to take the money out. I’ll have to spend it somewhere. The second point is that, for example, Airtel Money opens accounts for all of its 200 million customers; then in its current structure it becomes 20 times bigger in terms of the number of customers than its host bank. Now, if Airtel Money fails for some reason, even the host bank will fail and vice versa. We thus argue that it is safer to snap that relationship (and interdependence) between banks and telcos. If a bank wants to create a payments company it should be allowed to create a subsidiary of its own and operate with it. Airtel Money, we feel, should be allowed to become Airtel Money Bank so therefore there is no link with any bank and instead of putting money in an escrow, they put money in government securities and are regulated like any other bank. But are there many takers for this model? Our sense is that this is the way forward for them to grow. It is because even after five years of operations, Airtel Money only has 40,000 cash-out bank accounts out of 200 million Airtel customers, and this is ridiculous. In other countries the same players have gone ahead and become huge players – in not just four countries but in Europe also there is a movement towards non-bank companies. So if you take two potential competitors and ask them to collaborate, then the business doesn’t grow. Each must be left to do their own things and while there will be some competition for margins, this is more of an additionality.     If banks claim that they have realised the business opportunity of FI and are looking at it with seriousness, why do we need other institutions? The thrust of our report is that there is no one good idea. So it depends a lot on the banks and dynamics of an area. Different entities do well in different areas and it is about adopting the right model for the right place. For example, in Punjab, where banks were always doing a lot of lending, they would be more than happy to do FI there. You call the payments banks a safe option. Some bankers think it is a risky model and the product of our impatience for results which could be destructive for the entire ecosystem. Your views? Clearly, we take the same view of the PPIs that are there today. So, maybe, what some of these bankers are saying is that shut down Airtel Money, Vodafone M-Paisa and the others. But what we are arguing is similar to them, that it is better to make them a bank. A payments bank effectively is like any other bank but which says that it will not lend money and instead buy government securities from whatever deposits it gets. There is some talk of expanding white-label ATMs to tier-3 and -4 areas despite their slow roll-out in tier-1 and -2 areas. What is the logic? We are not talking about white-label ATMs and are instead talking about white-label BCs. BCs already exist on the ground and when we spoke to them during the drafting of the report the common complaint was the viability aspect. As a BC of a bank for instance, he/she can only serve say 20 per cent of the villagers who are customers of that particular bank. So in order to bring about viability, it would make sense to make these BCs white-label BCs who could service all the banks and thus cater to 100 per cent of the villagers no matter which bank’s customers they are. For viability and better retention of BCs, shouldn’t banks instead explore the option of giving these BCs permanent employment? The panel certainly believes in the notion of a bank in a bank. So instead of BCs becoming an employee of a bank it makes a lot of sense for banks to create specialised units inside the bank that have a different focus, pay structure and the BCs are a part of this group. The challenge that banks have found is that while initially you may start like that you end up facing the old troubles where there are unions, strikes, etc., and the pay scales become the same. And that is why people have liked the notion of an agent who is not on your rolls. So one way to solve the viability and retention issue is to make the BCs your employee but effectively you are also raising your cost structure. Instead, it is better to look at adjacencies. Today, banks are in talks with CSCs, mobile recharge outlets, etc and that is because these entities have adjacencies and multiple sources of revenues. This is a more promising mode. It is important to bear in mind that one challenge of India will remain, we are a poor country and will remain a poor country, at least on the per capita basis, for a very long time. It is thus unrealistic to expect that we will have a lot of customers who will keep huge sums as balance in their accounts and so we will have to find low-cost methods to reach out to these customers. And this is why the payments banks look attractive. MFIs have existed for long and have done well. But do you think with greater banking penetration a few years later, MFIs should rethink their business model and consider becoming BCs or banks? What we recommend is that just like we are talking about PPIs becoming payments banks, we recommend that MFIs should become wholesale banks so that they become a part of the banking system, can continue with their business model of wholesale borrowing and lending and maybe in four-five years if they can demonstrate that they can run this business successfully, they can apply to become a full-service bank.      Your report also argues that the regulator should be a referee and not a captain always directing banks. By that logic, we should also do away with this norm for 25 percent branches in rural areas. We did spend a lot of time debating this question during the committee meetings. Most bankers felt that this norm has been fruitful because otherwise there is so much opportunity everywhere that banks may not need to go beyond urban centres. What we put down, therefore, is that branches need to be defined more flexibly. So the RBI should continuously evaluate if the norm is necessary as more and more players enter the sector and a lot of inclusion activity has happened. What about this perception that private players are not doing enough and still treat it as CSR? When there were only small private banks, one could take that view. But a large private bank with a Rs 5,00,000 crore balance sheet out of which 40 per cent is coming from rural areas will have to do financial inclusion as a serious business; if not there will be defaults and they will have to shut down the bank. So I think everybody is trying their best to do this business as well as they can. We have spoken about the supply-side of banking services but what about the demand-side? The panel believes that there is a lot of latent demand. We don’t find a shortage of demand for savings, payments or even credit for that matter. The challenge has been our ability to ensure good supply because we make access so hard that the moneylenders and adtiyas (conduits) continue to flourish. Banks may feel that Rs 1,500 is too small an amount but it is important to remember that everybody’s economic circumstances are different. By arrangement with Governance Now

5390 - Aadhaar Linked MGNREGA: Looking back on the way forward - One Square Pixel

Aadhaar Linked MGNREGA: Looking back on the way forward
A study on Implementational Challenges in linking of Aadhaar to MGNREGA

Akshay Kashyap1

Prime Minister’s Rural Development Fellow, Jharkhand Union Ministry of Rural Development, GOI.

Large scale employment generation programs and social security nets promise a lot but are hard to implement because of their transaction intensive nature. Schemes of such scale are plagued with the challenges of leakages and corruption, which reduce the credibility of these programs amongst the poor. Aadhaar is being seen by many as an effective tool for curbing these leakages in the delivery of social safety nets. Multiple pilots and proof of concept tests that have been carried out in the country for linking Aadhaar to these safety nets and they have yielded mixed results.
To ascertain leakages that the union of Aadhaar and MGNREGA can plug and governance challenges it can solve, it is necessary to look deeply into the process of Aadhaar linking to MGNREGA with a clear view on challenges and operational bottlenecks that arise in this initiative. The paper tries to do it with a research methodology called the net-mapping. This paper aims to help in identifying the implementational bottlenecks in the linking of Aadhaar to MGNREGA and inquire into the possible implementational issues of MGNREGA that Aadhaar linkage can solve.
Mahatma Gandhi National Rural Employment Guarantee Act (Mahatma Gandhi NREGA or MGNREGA) is the largest employment generation programme in human history (MoRD, GoI, 2013) with a total expenditure of Rs. 397.1 Bn. (USD 6.39 Bn.) in financial year 2012-13. The Scheme has been able to provide employment to as many as 49.88 Mn households in FY 2012-13. It has managed to have a significant impact on the social security in India by addressing issues like Income and Livelihood Security, Gender and Social Empowerment, Sustainable Asset Creation, Environment Services and Agricultural Productivity amongst others (Mord, GoI, 2006-2012). A recent study initiated by Ministry of Rural Development, Government of India, (Esteves, et al.) highlights multiple environmental and socio- economic benefits of MGNREGA which have, in turn led to increase in adaptive capacities in beneficiary households.
1. MGNREGA: Challenges and Adaptations
1 (The views expressed in the write up are author’s personal and do not reflect the official policy or position of the organization.)
The author would like to thank Nilanjana Moitra useful inputs throughout the study and Ankita Aggarwal for helping in methodology, tools and concepts. Mohammad Razi for being a part of field study team, Reno Ann Cherian and Sameera Shamim for their reviews of the paper.

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There are major challenges that span across the lifespan of MGNREGA process, such as awareness amongst workers’ of their entitlements under the act, planning, demand and allocation of work, material procurement and timely payment of wages which plague the scheme. Since its inception MGNREGA has been evolving and has been trying to face these challenges through significant changes in the program and its implementation. The major changes that were incorporated in MGNREGA include

•   Expansion of permissible works to strengthen the positive synergy amongst MGNREGA, agriculture and allied rural livelihoods and provide location based flexibility.
  
•   All MGNREGA wage payments should be made through banks/Post Office (PO) accounts opened in the name of the worker to increase transparency in wage payments and reduce misappropriations.
  
•   Introduction of Social Audits and Vigilance to bring in transparency and accountability.
  
•   Bringing all documents and data in public domain through all-encompassing Management
  Information System (MIS) to enhance transparency.
  
•   Introduction of Electronic Fund Management System (E-FMS) to ensure that idle funds are not
  lying at any level (MoRD, GoI, 2013).
  It can be noted from above that many of these are innovations which leverage Information and Communication Technology (ICT). As the magnitude of MGNREGA scheme is very broad in terms of geographical, financial and social perspectives, leveraging ICT tools become a necessity in this context.
  2. Information and Communication Technology in MGNREGA: The Andhra Experience2
  An interesting case of an ICT based intervention in MGNREGA is the Andhra Experiment. In the state of Andhra Pradesh, a system has been deployed where a smart card containing basic details of the worker’s bank account and biometric thumb impression is issued to the worker. Through the use of biometric technology and Global Positioning System-enabled ICT devices on work sites, biometric attendance is also taken. The bank appoints a Customer Service Provider (CSP) identified by the Business Correspondent (BC) and trained by the bank. The wages are distributed after biometric authentication by the CSP through hand held devices, usually at government premises, such as Panchayat Bhavans. In the subsequent phase, the system is also supposed to generate job cards, work estimates, pay orders and pay slips. This is a computer based system which is tightly integrated end to end. It involves collection of UID compliant biometric data of all MNREGA workers, creation of a state data warehouse, verification of real time attendance for MGNREGA workers at the worksite through hand-held devices and its transmission through GPRS, CDMA, PSTN or Internet connectivity. The system updates muster roll records and MGNREGA web-based MIS and supports bank’s BC with mobile micro ATM devices to deliver wages at the workers’ doorstep. This ensures that any work registered in the system is alive and is traceable due to biometric authentication at various stages. This system uses locally stored biometric data for authentication of worker at various levels and also for de-duplication3 of database which
  2 (Reddy, Sujatha, & Jyotsna, 2011)
  3 Data de-duplication essentially refers to the elimination of redundant data. In the de-duplication process, duplicate data is deleted, leaving only one copy (single instance) of the data to be stored
  

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essentially means that one worker can be associated with only one job card number, one bank account etc.
3. Aadhaar: Next revolution in ICT
The impact of ICT initiatives in Andhra Pradesh has been immense... Each and every rupee expended on labour and work can be clearly traced out using this system. The continuous monitoring and tracking through Web reports improved the “timely payments” from 10% in 2006–07 to 80% in 2010–11. (Reddy, Sujatha, & Jyotsna, 2011)(sic.)
In the context of Andhra experiment, Aadhaar is a similar ICT based tool which leverages biometric technology for delivery of services. Many are of the opinion that Aadhaar is a tool, powerful enough to bring about plethora of positive changes. Leveraging of Aadhaar in MGNREA is being seen as the next big step towards this evolution. As the Planning Commission notes, a partnership with the Unique Identification Authority of India (UIDAI) and adopting the BC model is poised to help in tackling key problems of MGNREGA like fake job cards and muster rolls as both these documents will show the Aadhaar number of the worker and curb leakages as the MGNREGA worker will biometrically confirm receipt after the payment (Planning Commission, 2010).
4. Promises of Aadhaar
From the concept of "unique ID for Below Poverty Line (BPL) families" in 2006 to the Unique Identification Authority of India project which has generated more than 540 Mn unique id’s4, Aadhaar has come a long way and has been able to put to rest the most widespread criticism, “can it be done ?”. However, the most important aim of this nationwide program, to improve delivery of social security programs is yet to pass the test of times.
Primary mandate of Aadhaar is to provide unique ID Number to all residents as well as provide online, cost-effective, ubiquitous authentication services across country. Aadhaar is a random number with standard attributes, without any smart card, intelligence or profiling. Aadhaar in itself does not give any one any guarantees to Rights, Citizenship or Entitlements. The UIDAI claims that there are no fakes or duplicates in the Aadhaar database which is ensured through biometric attributes and 1: N check at the time of Aadhaar generation. Aadhaar is meant to be unique for life long.
Aadhaar when used as a financial address5 for benefit transfer at level of government through Aadhaar Payment Bridge (APB) promises to remove ghost and duplicate identities. When used for the purpose of disbursal at level of financial institutions using Aadhaar Enabled Payment System (AEPS) can ensure that the funds are received by the intended beneficiary through biometric authentication, thereby reducing chances of rent-seeking by middlemen. Aadhaar brings in the idea of authentication based on what one
4 As on 10-01-2014 from uidai.gov.in
5 Bank account, PO account, prepaid card, e-wallet or any other RBI approved payment instrument. (Task Force on AEUPI, 2012). Using of Aadhaar as a financial address means that the payment advice carries only Aadhaar number and the amount and through a mechanism, the amount is credited in the account associated with that Aadhaar number.

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has (debit card, credit card) and what one knows (pin, passwords) to what one is (biometric attributes). In this process Aadhaar also promises to bring a high number of residents in the ambit of formal financial institutions and reduce cash flow in the economy hence reducing the cost of handling cash6. Aadhaar promises an interoperable transfer of benefits for central schemes. For e.g. resident of village V1 in panchayat P1 of block B1 collecting Public Distribution System(PDS)’s ration in village V2 in panchayat P2 of block B2 provided that the scheme has a central beneficiary database and uses online authentication of Aadhaar for disbursal of benefits. The Reserve Bank of India (RBI) in the year 2011 has notified Aadhaar number as a valid Know Your Customer (KYC) proof in India enabling the implementation agencies to open Aadhaar enabled accounts with ease7. As the next step towards
The Aadhaar linked fund flows from the Government to the beneficiary gives full traceability, audit trial, and non-repudiation which can be utilized in ensuring accountability. Aadhaar makes its presence felt majorly in the last stage - in its use for authenticating transactions and enabling banks to reach out to its customers in a secure manner.
5. Aadhaar in MGNREGA: The Debate
The proposition of linking MGNREGA with Aadhaar has been debatable since its very inception. While some appraised it and others criticized it, the deliberations continued. In a study measuring the impact of Aadhaar Enabled payments of MGNREGA wages, technical perfection of Aadhaar relating to biometric authentication, requirement of connectivity for AEPS, goodwill of the BC, Incomplete coverage of Aadhaar have been found as matters of concern. It was also found that Aadhaar linkage in MGNREGA could cause serious implementational issues (Bhatti, Dreze, & Khera, 2012). Some other arguments have been directed towards using Non-ICT based methods rather than Aadhaar Linkage that have been very successful in bringing transparency to the MGNREGA, like the MGNREGA Wall in Rajasthan (Dey, 2011). A major reason for delay in wage payment happens before AEPS could come in like measurement and muster roll filling. Also, major leakages happen in material cost where Aadhaar can hardly contribute.
There have been some experiences in the field where it was observed that multiple problems plague the Aadhaar enabled benefit distribution. These include problems like technological challenges, connectivity security and integrity of BC’s. (Yadav, 2012)
A news article authored by Hon. Union Minister of Rural Development, titled ‘Aadhaar and MGNREGA made for each other’ presents the other side of the coin (Ramesh, Mann, & Pande, 2012). This article argues that for improving service delivery of a system of the scale of MGNREGA, Aadhaar is the only
6 Cash is expensive for everyone, due to cost of cash management, cash handling, security, wear and tear, fake currency notes etc. (Task Force on AEUPI, 2012)
7 Vide RBI circular no. RBI/2011-12/207 dated September 28, 2011 Accessed on 15-02-14 from http://rbi.org.in/Scripts/NotificationUser.aspx?Id=6739&Mode=0
8 Vide RBI circular no. RBI/2013-14/337 dated October 25, 2013 Accessed on 15-02-14 from http://rbi.org.in/Scripts/NotificationUser.aspx?Mode=0&Id=8526

reducing the risk of identity fraud, document forgery and have paperless KYC verification, RBI has

accepted the e-KYC service of Aadhaar as a valid process of KYC verification8. This enables a person to

walk in a bank without any document and get a bank account opened, which might give a push to

financial inclusion.

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solution. It has advantages over other biometric solutions in terms of interoperability amongst government services, uniformity of biometric standards, mobile identity that can be accessed from anywhere in a secure way. The intention of the government of India is clear that it wants to move towards APB and AEPS using interoperable micro ATM’s. This system will credit all benefits in one account linked to one Aadhaar number used as a financial address for the transactions (MoRD, GoI, 2013, p. 70)
6. Research Question:
One of the biggest challenge in Mahatma Gandhi NREGA, as described above, is the challenge of avoiding leakages and corruption and bringing in transparency and accountability. MGNREGA involves multiple steps from demanding work to disbursement of wages to completer one cycle that need to be executed in succession. This challenge is difficult as it is ‘transaction-intensive’ in terms of time and space and also the program requires discretion at various levels (Raabe, et al., 2010). This study is based on the recognition that flawed implementation of an idea can make the entire idea look non-practical. The study tries to look into the implementation of the Aadhaar linked MGNREGA at various levels and explores major implementational issues in the above process. The study also tries to investigate which specific implementational issues of MGNREGA can be solved with help of Aadhaar linking to MGNREGA. The study also explores to estimate the share of leakage and corruption, these specific implementational issues contribute to. It will try to present a comparison between two models of Aadhaar linked MGNREGA, BC model and India Post model and investigate the extent to which these pilots have been plagued by the implementational issues.
During the study, the researcher has explored the process of MGNREGA in depth with various stakeholders. There were some important issues outside the scope of the study that were raised by the respondents during the research, which have also been incorporated in the findings.
7. Case Study: Selection of Cases and Research Methodology
To comprehend the implementational gaps in the Aadhaar linkage to MGNREGA understanding the process, stakeholders and their influences on the outcomes becomes most necessary. For this purpose two case studies were conducted in two blocks of one district in Jharkhand. In general, the implementation of MGNREGA in a state can be expected to depend on the quality of governance. Poorer states have greater demand for work under MGNREGA due to the built in ‘self-targeting’ mechanism as poor people find work on the scheme more attractive than the non-poor do. However, actual participation rates in the scheme are not any higher in poorer states where the scheme is needed the most. In spite of higher demand for work, the poorer states have lesser capacity to implement MGNREGA effectively because of institutional factors and lack of implementation capacities (Dutta, Murgai, Ravallion, & Walle, 2012). With a population of 33 Mn as per Census 2011, the state of Jharkhand accounts for 2.72 percent of the total population of the country. The incidence of poverty at the state level was 39.1 percent in 2009-10 as per Tendulkar Methodology as compared to 29.8 percent

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for India as a whole9. In 2004-05, the poverty ratio among Scheduled Tribe (ST) population in Jharkhand was 54 percent as against the national average of 45%. The same among Scheduled Castes (SC) was 58% as compared to 37% nationally which shows significant social exclusion. Naturally, it can be assumed that MGNREGA should attract more people in the state of Jharkhand. Therefore, the demand for work as well as person days generated should be high and ever increasing. On the contrary, the person days generated by MGNREGA in last three financial years have been coming down significantly.
On the other hand, Jharkhand has done exceedingly well when it comes to Aadhaar generation with a figure of 78 %. The government of Jharkhand, in the past couple of years has moved fast towards e- governance and in this endeavor, has hitched its wagon to Aadhaar. The department of Information Technology, government of Jharkhand has issued a notification10 which makes Aadhaar an essential tool for delivery of services. This has been one of the reason that many pilots for linking of Aadhaar with various social security schemes11 have been carried out in Jharkhand with mixed results.
In 2008, the government of India shifted from cash payment of wages under the MGNREGA to settlement through bank or PO accounts. As the state of Jharkhand is poorly serviced by banks with as high as 13200 persons per branch12, most of the MGNREGA wage accounts were opened in PO’s. As per current scenario in India, Department of Post has the maximum access to rural population. They are one of the largest banking facility providers to rural India. In Jharkhand 7 postal divisions cover 24 districts. Out of total 4423 Gram Panchayats (GP) in Jharkhand, 2544 GP’s have post offices and rest 1879 GP’s are being served through PSSKs (Panchayat Sanchar Seva Kendras)13. Post offices have a non – Core Banking Solution based system resulting in delay of payment of wages to MGNREGA workers.
This paper will present the results from a case study of two pilots carried out jointly by the government of Jharkhand and UIDAI. These pilots were aimed at linking MGNREGA wage payment mechanism to Aadhaar. The pilots were supposed to ensure timely payment of wages to MGNREGA workers and clean up the delivery systems to a large extent. The first of these Pilots was carried out in 12 blocks in four districts of Jharkhand in December 2011 using Panchayat Bank: Customer Service Center Model. The second pilot has been carried out recently (FY 2013-14) in Namkum block of Ranchi in an attempt to leverage the India Post systems through providing an Aadhaar based micro ATM to Sub Post Offices (SPO) for disbursal of wages. In Pilot 1, Ranchi has been chosen as the sample district and Ratu as the
9 Source: Planning Commission (July 2013), Press Note on Poverty estimates, 2011-12; Commission (January 2011), Press Note on Poverty Estimates.
10 Vide resolution number 1544 dated 04-07-2013.
11 PDS Automation, Scholarship disbursement, National Social Assistance plan computerization, cooperative bank computerization are some of the efforts which leverage Aadhaar as an enabler for service delivery
12 Number of bank branches in Jharkhand is around 2500
13 Data obtained from project documentation of India Post pilot, UIDAI Cell, Ranchi, Jharkhand

			FY 2013-2014 (Till Feb 15th 2014)			FY 2012-2013			FY 2011-2012
	Total No. of HH Registered (in Mn)			3.949			4.027			4.023
Person days(In Mn)			35.3			56.6			61.2

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sample block for the reason that the second pilot was also conducted in this district and both these blocks are at a similar distance from district headquarters which gives the researcher, a chance to put the findings on a similar platform for comparison.
The study uses an innovative empirical research tool, Net-Map developed to better understand multi- stakeholder governance by gathering in-depth information about governance networks, goals of actors, and their power and influence. Net Mapping has been carried out in three steps. Firstly, mapping of all stakeholders involved in the process was done, followed by flowchart of the steps involved in the process and then the ranking the influence of various actors on the process. This resulted in a Process Influence Map (PIM) that served as a basis for discussions with the respondents. This map was particularly useful in identifying the problems in implementation, identifying entry points of these issues and also the entry point of leakages and possible interventions.14 An eclectic mixture of both qualitative and quantitative research methodologies have been used in order to approach the study in a much more inclusive and all-embracing manner.
The Study has been carried out by the researcher through PIM carried out through four focused group discussions (FGD’s) of Gram Rozgar Sevaks (GRS), Gram Panchayat Sewaks (GPS), Block Program Officers (BPO), Block Development Officer (BDO) and other functionaries, two in each block. Twenty workers who have received MGNREGA wages through AEPS as well as those who have received wages through post offices or banks were interviewed in each pilot block as sample. Apart from these beneficiaries, stakeholders who are involved in implementation were also interviewed. These stakeholders include one Bank Manager in each of the blocks, one Postmaster in each block and one Panchayati Raj Institutions (PRI) members in each block. Also, UIDAI authorities at district and state level were interviewed to get a comprehensive picture.
The section 8 and 9 elaborate the processes adopted in these particular pilots. As explained above, the PIM’s used in these sections have been drawn during the exercise of PIM through a FGD with the block functionaries. The PIM’s used in both the cases illustrate the main processes as well as the flow of funds of transaction orders. The part of transfer of funds from central government has been omitted in the PIM’s as the focus was on implementation in smaller administrative units i.e. Blocks and Panchayats. The PIM’s makes an assumption that there is sufficient fund present in the account of the panchayat at the time when fund transfer is initiated. The indication of ‘Entry points of corruption’ indicates the possible points of entry of corruption in MGNREGA and not in this particular pilot. Rest of the indicators are specific to the pilot in case. The major findings of the study are presented in sections 8 and 9 as well as section 10 in the form of implementational bottlenecks. It should be noted that since these PIM’s have been made by stakeholder’s opinions, it might not match the exact process as described through official guidelines of MGNREGA.
14 Net-Map is an interview-based mapping tool that helps in understanding, visualizing, discussing, and improving situations in which many different actors influence outcomes.
Source: (Schiffer, Mannual - Net-Map Toolbox : Influence Mapping of Social Networks, 2007) , (Raabe, et al., 2010) (The World Bank, 2007), (Schiffer & Waale, Tracing Power and Influence in Networks : Net-Map as a Tool for Researchand Strategic Network Planning, 2008)

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8. Case Study: Pilot project 1- linking Aadhaar to MGNREGA through BC model

Figure 1: PIM of Aadhaar linked MGNREGA Pilot 1

Register for MGNREGA Registers the worker in NREGA soft and issues a job card to the resident. Bank /BC opens an Aadhaar Enabled Bank Account of worker in the ‘Block Bank’. The panchayat office also keeps a record of Aadhaar number and bank account of the job card holder in their database. Demands for work in written or verbally Work allocation is done Worker works on the work site allocated to him Mate Supervises is the work and makes daily attendance of the worker

Engineers does the measurement and prepares measurement book Data entry of muster roll and material and expenses in Nrega soft. Wage list is generate manually. Gram Pradhan (PRI member) and Panchayat sevak write a check for the amount. The wage list along with the check is sent to BPO. This Wage list contains job card number, Aadhaar Number amount to be paid. BPO Forwards this to DPO, UIDAI. DPO generates payment advice with his software. This payment advice contains Aadhaar number of the workers and amount to be paid. Check along with wage list is sent to the bank in a .csv file in prescribed format by bank. Since the block bank has all the accounts – Panchayats and workers, bank does an inter-bank transfer. BC in panchayat Bhavan disburses wages with Aadhaar authentication.

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This pilot project was undertaken in December 2011 for linking Aadhaar to MGNREGA. For this pilot, the state of Jharkhand used the ‘Panchayat Bank: Customer Service Center Model’ with one block one bank approach and BC model for disbursal of wages. The advantages of this method were that the BC was able to operate the bank account of a MGNREGA worker from the Panchayat Bhavan. This was done with a hand held device which was capable of Aadhaar based authentication for providing banking services15 to the customers. Twelve Blocks were selected for implementation of this model. Through an exercise, Banks were allocated blocks according to their presence in the blocks. All account of Blocks, Panchayats and beneficiaries in that block were opened in that particular bank. Banks were asked to open Aadhaar enabled bank accounts for active job card holders of MGNREGA in that block to ensure 100% Financial Inclusion for cash transfer under MGNREGA as well as other social sector programs such as old age pension, etc. Banks were also asked to establish Panchayat banks either through Customer Service Centre’s or any other BCs. The banks were supposed to get 2% transaction fee for each transaction made by the customer. At the last mile, the BC uses the Aadhaar based authentication for the disbursal of wages.
Figure 1 illustrates the PIM for implementation of MGNREGA as followed during this pilot. The pilot involves one time capturing of Aadhaar. This is either done at the time of job card registration for new workers or at the time of Aadhaar enabled bank account opening. After this activity, Aadhaar enabled bank accounts of the workers were opened through BCs or bank branches. The above process acts as an enabler for doing the Aadhaar based transaction and disbursement of MGNREGA wages through AEPS. Muster roll used at the work site contains Aadhaar number of the workers in addition to the job card numbers. The wage list is generated from this muster roll is sent to the bank after passing through various checks and functionaries. The Aadhaar number is used to credit the workers account using APB by the bank after receipt of payment advice.
Figure 2 illustrates the benefit of such type of transaction. Aadhaar is used as a financial address instead of bank account number or name as an identifier of account. This helps in ensuring that the cases of fraud using a different bank account (for e.g. worker W1 has worked in the site and Worker W2’s account number is given in the payment advice) can be avoided. Also, worker W1 with two different account numbers cannot get paid twice since Aadhaar number is unique for a person.
Once the amount is credited to the account of the worker, the worker is able to withdraw that amount through a BC who is stationed at the Panchayat Bhavan. For this, the worker had to approach the BC with account number or Aadhaar number. With the help of a handheld device, BC is enabled to all banking transactions including opening of account, withdrawal, deposit and fund transfer. When the worker requests for money, a fund withdrawal request is triggered by the BC. This fund is allowed to be withdrawn after debiting the bank account of worker through Aadhaar authentication of any one of the biometric attribute of the worker.
15 Account opening, withdrawal, deposits and remittances

Figure 2: Aadhaar Payment Bridge: A simple Architecture

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•Advice containing only aadhaar number and amount sent to NPCI
Payment Advice Sent to NPCI

NPCI segregates the advice according to banks
•NPCI has the information of which bank holds the account for a corresponding Aadhaar number
•It does know the account number corresponding to the Aadhaar

•NPCI sends the advices with aadhaar and amount to concerned banks which holds account for the corresponding Aadhaar
NPCI sends the segregated advices to concerned banks

Respective banks Credit the accounts
•Bank credits the account which is linked to the Aadhaar.

Entering job card number of workers who have not worked at the site in the muster roll is a major point of entry of corruption. The wages received against such job cards can be easily siphoned off by the functionaries. The process involved in this pilot can have a reverse impact on the above situation. It does not ensure that job card of workers who have not worked (say W1) at the site will not be entered in the muster roll. However, it ensures that only the worker (W1) who holds that account is able to withdraw the wages and not some functionary in his name. In the case of this Pilot, siphoning off of money in this way was found to be difficult
The handheld device also announces the amount that is being withdrawn for the benefit of illiterate workers. Once the money reaches the hand of the workers, it is very difficult for any functionary or contractor to take or manipulate that money from the worker. At the time of this pilot, the NREGA soft16 had not moved on to E-FMS system of payments. Also the facility of seeding of Aadhaar number in NREGA soft was not present which has been subsequently added. In fact, the some of the procedures that were followed in such pilots, were eventually added in the E-FMS by the union ministry of Rural development.
On the downside, the bank accounts operated by the BCs are non-interoperable. This means that if worker has an account in any bank other than Bank of India (block bank for Ratu block in this case), the worker cannot withdraw the money. The pilot was aborted after repeated cases of biometric authentication failures, where workers were not able to authenticate at the time of payment at BC outlets. These failures were attributed to enrollment of people using ‘biometric exception’ which has been explained in the section ahead.
16 MIS of MGNREGA. Can be accessed at nrega.nic.in

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There are two BCs in Tarup and Purio Panchayats which are doing banking transactions till now and have added some beneficiaries of Indira Gandhi National Pension Scheme. However, since the pilot was stopped last year, the number of transactions in the current year has come down drastically for these BC’s.
9. Case Study: Pilot project 2 - Disbursal of wages through India post bank account
This pilot project was undertaken in the financial year 2013-14 and started functioning in October 2013. Figure 3 explains the PIM for the implementation of MGNREGA followed during the pilot of linking India post network to Aadhaar for payment of wages.
The process involves once time capturing of Aadhaar as well as PO account. These details are entered in the NREGA soft for freezing the worker’s account which makes the worker’s account E-FMS ready. When a worker demands work, an Electronic-Muster Roll (E-Muster roll) is generated and work is allocated to the worker. According to PIM this is an entry point of corruption. There can be cases where muster roll contains names of such workers who have not demanded work. After the E-muster roll is generated the work is allocated to the workers. The mate17 supervises the work and makes attendance of the workers in the muster roll. On the 7th day after start of work, this filled up E-muster roll is entered in NREGA soft and wage list generated. The Fund Transfer Order (FTO) is processed by first and the second signatory respectively. The role of the Block MGNREGA office (BDO, BPO, GRS and GPS) is completed at this point. According to field functionaries they never come to know the process that is followed after the FTO is generated and sent. They only come to know when the amount is credited in the PO account of the worker. After the amount is credited in the account, the post master disburses the amount when worker requests a withdrawal. As described by post office and the UIDAI staff, the process of crediting the beneficiary account after the FTO is generated is explained in steps 13 to 19 in the figure 3. Noteworthy here is that the India post’s network of post offices is not on the core banking system and this has been a major bottleneck in crediting the wages to workers accounts. Most of the rural post offices are not computerized and they follow complete manual process for carrying out banking operations and account maintenance. Head Post Office (HPO)’s and SPO’s are computerized but not linked to each other. After the nodal bank of the District Program Coordinator transfer funds to nodal bank of HPO, HPO updates the account details of workers according to the wage list. From here on a manual update of workers account details in SPO is done, followed by manual update of workers accounts in the Branch Post office (BO). It was noticed in FGD’s a typical FTO from the time of processing to crediting takes 15- 20 days. The disbursal is also done by the postman through a manual method of collecting withdrawal slips, updating the pass book and then disbursing the amount.
The solution to this problem was seen by the administration through providing an Aadhaar based Point of Sales (POS) device to BO’s for Disbursal of Wages. This POS device is capable of Aadhaar based transactions to India Post accounts of MNREGA workers through AEPS. When FTO is generated, a copy is
17 A mate or worksite supervisor is required for each work-site. At least one mate should be present for every fifty workers. (MoRD, GoI, 2013)(Sic.)

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Figure 3: Process of implementation of Aadhaar linked MGNREGA Pilot 2

Normal Process of payment through post office in MGNREGA
Register for MGNREGA Registers the worker in NREGA soft and issues a job card. GRS visits the registered worker and collects/verifies Aadhaar and P.O A/c of all members of the household (>18 yrs.) GRS sends data for seeding in MGNREA Soft to BPO. BPO seeds the data in Nrega soft BDO Freezes the Account in NREGA Soft. Demands for work in written or verbally E-Muster roll is generated and Work allocation is done Worker works on the work site allocated to him Mate Supervises the work & makes daily attendance of the worker On the 7th day, Data entry of E- muster roll and material expenses in Nrega soft and generates wage list material list and admin expenses list P.S Generates FTO and digitally signs	G.P Verifies and approves FTO by digitally signing it and sends the FTO for processing. FTO is send to the bank Account of the DPC. The Bank of DPC debits the account of DPC and Credits the nodal bank of HPO The Nodal bank of HPO transfers the funds to the Accounts of workers in HPO and transfers funds accordingly HPO updates the account details of workers in SPO through a web service and transfers funds accordingly The Account details of workers is updated in the Branch P.O manually by post master visiting the SPO. Transfers funds happen accordingly. BO distributes wages to worker who need to fill up a withdrawal slip
Alternate Process of payment in Pilot (Steps 1-13 Remain the same as above)
13b. a Copy of FTO Sent to JAP-IT 14. FTO is send to the bank Account of the DPC. 15. The Bank of DPC debits the account of DPC and Credits the nodal bank of HPO 16. The Nodal bank of HPO transfers the funds to the Accounts of workers in HPO and transfers funds accordingly	16b. the information is updated with the JAP IT server which matches it with the information available from the FTO. 16c. JAP-IT provides the information to the B.O though hand held device when requested. 19b. B.O distributes the wages from account using the information in HHD through an Aadhaar authentication through HHD.

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also sent to a server in JAP-IT18, which has been setup for this pilot. This server keeps the information provided in the FTO in its database. The FTO is processed and when HPO updates the account details of workers in HPO according to the wage list the information is sent to the server in JAP-IT also which updates its database with this information.
Once the information is updated in the JAP-IT server, BO postman, using the POS device, is able to do the transactions like of Withdrawal, Deposit, Peer to Peer Transfer, Balance Enquiry, all through Aadhaar authentication. The system deployed in this pilot, as seen during the interviews with state officials, is supposed to reduce beneficiary travel time and cost, eliminate fraudulent transactions. It may also expand the horizon of financial inclusion for the workers as other banking transactions could also be made available to PO account holders. It was noticed that system has made the fund flow faster and a typical FTO using this system takes 6-7 days to get credited in the account of the beneficiaries as opposed to 15-20 days in the normal method.
It came out during PIM that in the case of PO account of workers, major corruption takes place by the functionaries or mate or contractor in collusion with the post master. This is done through getting withdrawal forms pre-signed/thumb impression taken well in advance by the functionary. Whenever the accounts are credited, the entire amount is withdrawn by the functionary/mate through these forms. Some of that money is distributed between the workers who worked and rest is siphoned off. This is particularly practiced where there is one or more fraudulent names that have been entered while generating E-muster roll. The mate/functionary can very easily withdraw the amount that has been credited in any such account. With the system of Aadhaar authentication only the rightful worker could withdraw the amount. The worker is able to know the amount that has been credited in his account as the slip generated through the POS device mentions the balance and withdrawal amount in local language. There were other facilities provided in this POS device like facility of seeding Aadhaar number of an account holder in the PO account and also BFD19 utility.
10. Identified Implementational Bottlenecks:
Seeding of Aadhaar in various databases: Organic method of collecting Aadhaar numbers from the workers was followed by the GRS and GPS. According to this method, these functionaries visit door to door to collect the Aadhaar numbers of the active workers. Although this is supposed to be a one-time exercise, there were multiple hassles that came in this process. First of all, this method of collection of data is time consuming and suffers from issues of workers not being present, not knowing there Aadhaar number, card misplaced etc. Apart from this, there were multiple instances where the workers were skeptical about giving the functionaries their Aadhaar number as they thought that multiples entitlements like social security pensions and PDS might be linked to this number. If workers give their Aadhaar to anyone, it could be used to withdraw their benefits. Other issues were noted during the FGD exercise such as multiple errors at all levels while collecting the Aadhaar from field. Aadhaar is a 12 digit number and has a high chance of error while writing down by functionaries. There were also mistakes
18 Jharkhand Agency for Promotion of Information Technology (JAP-IT) is an autonomous society under the Department of Information Technology, Government of Jharkhand.
19 BDF: Best finger detection is a facility which tells the user as to which is his or her most usable finger.

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like the Aadhaar number of Member 1 in job card was captured against the name of Member 2 and vice versa. Some of the records were entered incorrectly at the level of data entry in the block as well. This resulted in huge percentage of incorrect data about Aadhaar. Some of the GRS’s even claimed this error to be as high as 70% in their respective Panchayats during the first round of seeding. To resolve this, the GRS’s were asked to take photocopies of the Aadhaar card. This did not go very well either as it was difficult to get a photocopy done at panchayat level and many workers did not want to give the card to the functionaries.
There were orders to collect Aadhaar of beneficiaries of different schemes at different times. For e.g. first the functionaries were asked to collect the Aadhaar of MGNREGA workers, then for National Social Assistance Plan (NSAP) beneficiaries etc. depending on which department wants to link their scheme to Aadhaar. Many a times these beneficiaries overlap between different schemes. However, functionaries had to go on the field collecting Aadhaar multiple times for the same beneficiaries. There was no plan by UIDAI or the state government to carry out seeding in a systemic and a phased manner. This increased the overall cost of data collection, paperwork and also caused huge delays in the implementation. The result was repeated process of collecting Aadhaar and other details that are pre requisites to Aadhaar linkage to MGNREGA.
At the time when Aadhaar enrollment started, there was a Know Your Resident (KYR) form in the software which was supposed to record the data relating to various schemes like MGNREGA Job Card Number, BPL number etc. As discussed, to save time, the enrollment agencies ended up not collecting any of these details as it was not mandatory.
Biometric Authentication Problem: In Pilot 1, several cases were observed, where workers were not able to authenticate their biometric attributes (fingerprints in this case) at the time of payment at BC outlets. There were multiple beneficiaries for whom the authentication failed on the Micro-ATM. As also shared during the interviews later, in Purio panchayat, six workers were able to authenticate out of the 24 workers who went to collect wages. Similarly the number was 17 out of 26 in Tigra and 16 out of 20 in Tarup. . This was one of the major reasons why the pilot was discontinued as it was felt that the authentication is very difficult using this method. On the other hand, it was observed that in Pilot 2, instances of biometric authentication failure were very less. Out of the 30 workers that were interviewed, only two reported this problem. These two were also able to authenticate in a maximum of three tries.
Interviews with the UIDAI officials pointed out that the problem of biometric authentication failure was mainlyduetothereasonthatatthetimeofenrollment inRatublock,thereweremultipleresidentsfor whom biometric attributes could not be captured by the enrollment software easily. Ratu was the first block where Aadhaar enrollments had started in Jharkhand. The UIDAI software and systems were in an evolving stage at that time. There was a facility in the software for enrolling these residents as ‘biometric exceptions’. If the resident had any deformities due to which it is not possible to take fingerprints/iris, these also have to be captured as a biometric exception20. Fingerprints and iris need to
20 (UIDAI, 2010)

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be captured properly at the time of enrollment which is the basis of any further biometric authentication. The payment of the enrollment agency is linked to the Aadhaar numbers generated and the performance of the operators enrolling the residents is linked to the enrollment per day. These operators are neither well trained nor well paid by the agencies. They were also faced with various challenges in rural areas like heavy crowd management. To avoid wastage of time by trying multiple times, the enrollment agency operators enrolled such residents as biometric exceptions. Since these people were enrolled as biometric exceptions, they were not able to authenticate on the hand held devices. In the interviews with the officials it was noted, that in initial phase of enrollments there were cases where the operator had put his own biometric attribute in a resident’s Aadhaar. The number of residents enrolled with improper biometric attributes was more than .1 Mn in Ranchi district alone. Although, for many of these people, biometric attributes have been updated subsequently, it has been done in an ad-hoc manner as the process of updating biometric attributes has recently been standardized by the UIDAI. Now, the enrollment software has been updated. It take best of four trials for capturing biometric attributes and has been improved to generate Aadhaar numbers for only unique biometric attributes. The information about updating one’s biometric attribute has not been well communicated to field functionaries or the rural populations. Resident is provided information in the enrollment slip at the time of enrollment as to which all biometric attributes were captured. However the Aadhaar card of the resident does not contains such information. The extent of usability of the resident’s biometric attributes for a biometric authentication is thus mostly unknown to resident.
Opening of Aadhaar Enabled Bank Account: In the implementation of Pilot 1, most of the beneficiaries had account in the post offices where they used to receive their MGNREGA wages. They were asked to shift the accounts to banks for payment through AEPS. More than 450 new Aadhaar enabled accounts were opened as a pre requisite to Pilot 1 in the Ratu block of Jharkhand. This created a problem for the workers as the bank was much further away and also had stricter norms of opening accounts as well as transactions.
System not technically fool proof: There were also cases of some technical glitches present in the processing of FTO. In some cases, the account of the workers not credited in the FTO were shown as processed. There has been another glitch of dormant21 account. There were many cases reported by the functionaries where an account was being credited through cheque regularly but when the payment was triggered through APB, the account did not accept the payment. Reason for this rejection was shown as dormant account. Taking this into account, RBI has mandated22 recently that the stipulation of inoperative/dormant account due to non-operation should not apply to accounts opened by government for direct benefit transfer.
Exception handling and technical troubleshooting: The AEPS systems put in both the pilots are not capable of exception handling like registering cases of unsuccessful authentication due to communication errors. System records unsuccessful attempts of Authentication only when the
21 A
22 Notification no. RBI/2013-14/262 dated September 17, 2013 accessed at http://rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=8425

ccounts in which there are no operations (i.e. no credit or debit other than crediting of periodic interest

or debiting of service charges) for more than one year.

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biometric authentication fails. This leaves the system and the operator in the mode of confrontation as to whether the Aadhaar authentication actually failed or it was never attempted by the functionary. It was also noticed that there was no formal channel of technical or any other form of troubleshooting which leaves the ground functionaries in a dismay in case something does not work, particularly during Pilot 1.
Misinformation on Aadhaar: There is misinformation in the rural areas about Aadhaar. What is Aadhaar, what will happen if you have an Aadhaar number or do not have one, which of the entitlements or social security nets is linked with Aadhaar, for which services is Aadhaar compulsory, etc. are some of the questions which none of the MGNREGA workers are able to answer. As envisaged by the government of India, Aadhaar was supposed to be a number, which is unique to an individual but do not carry any entitlement or status. However, since there is pressure to push the idea of Aadhaar for cleaning the delivery systems, Aadhaar has been passed off as a number which is necessary for availing various benefits of social security nets by the field functionaries. This has been done in spite of the fact that there have been no official orders in this regard at any point by the administration. As explained earlier, due to this misinformation, many workers refused to share their Aadhaar cards or numbers with functionaries. Some GRS have told the workers that only those workers would be given work under MGNREGA who have given their Aadhaar number. In all, this exercise has made Aadhaar an all- important number for rural poor to hold on to without knowing its use or purpose.
Worker having multiple names at multiple places. There were cases shared during the discussions where a worker has multiple names in different databases like bank, NREGA soft etc. For registering in MGNREGA and getting a Job card, no documentary proofs are asked from the worker, therefore, in many cases, a persons’ name on the job card contains his/her ‘called’ name or pet name. However, opening of account in any financial institution requires documentary evidence to be used as a valid KYC document and thus contains a formal name. A typical wage list or payment advice sent to the bank for payment contains name of the worker, bank account number and amount to be credited. It was observed that many functionaries faced issues of the bank rejecting the advice when the name of the worker in the advice does not match the name associated with the account number in the advice. The problem of one worker having multiple names in multiple databases might be eliminated when APB is used for the payment as a payment advice generated requires only Aadhaar number and amount.
However, this is subject to seeding in NREGA soft and Bank as well as Mapping on NPCI. During the FGD’s it was noticed that the functionaries were unaware that the freezing can happen in NREGA soft even if names do not match at the block level as the BDO has the right to freeze the account. This problem still persists when it comes to seeding of Aadhaar number in banks and mapping on NPCI. When the data is sent to bank for seeding in their database, the bank does a check by matching the name of beneficiary from bank and worker database. In this case there are possibilities of rejection and many cases were noticed to this effect. Without seeding and mapping of data at NPCI, the process of payment through APB cannot be initiated. The field functionaries had no clarity which database or record should be updated and who shall update it.
No ground level functionaries for Aadhaar: Every social security net scheme, which has a large scale has field level staff for implementation. MGNREGA has GRS, Nirmal Bharat Abhiyan has Jal Sahiya, and

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Integrated Child Development Scheme has Sevika’s and Sahayika’s. Although Aadhaar is supposed to play an important role in all of these schemes, it has no grassroots level functionaries apart from a District Program Officer at the district level. Enrollment is done by private agencies who are concerned only about enrollment. Similarly, linkage of various schemes to Aadhaar is conducted through the functionaries of that scheme. In MGNREGA, the GRS is responsible for seeding, linking and all other processes that are required for linking of Aadhaar to MGNREGA. Firstly, this increases the pressure on the functionaries of MGNREGA because the linkage of Aadhaar is a time intensive process. Secondly, this creates an information vacuum as the GRS may be proficient in MGNREGA related activities but do not have much clarity on the process of Aadhaar. The information does not percolate to the target population due to this reason as well.
Huge dependency on one Bank: In the implementation of Pilot 1, the block bank has a major influence in this process for the reason that it holds the account of all the workers as well as the panchayat and controls the BCs as well. In case of cooperation from the bank the process is smooth. However, in cases of non-performance of the bank at any of the step, the entire process of MGNREGA is stalled. Locking in one bank to all the accounts of workers as well as block was contrary to the feature of interoperability of a unified payment architecture provided by Aadhaar (Task Force on AEUPI, 2012).
Credibility of Post office as a Financial Institution: In spite of being the single largest financial institution in terms of branches and the number of accounts, particularly for MGNREGA, the credibility of post office as a financial institution remains low in the rural population. Multiple workers who receive MGNREGA wages in the PO account claimed that they visit bank once a month, to deposit the money they receive as MGNREGA and other wages. This is mainly due to the fact that rural population does not get full financial services ecosystem from the post office. Neither do post office provide proper saving facility, nor does it provide credit facility. In many cases, it happens that when many account holders turn up to withdraw money from post office, the cash in branch post office runs out due to small credit limit. The challenge is to start thinking beyond “crediting wages to PO account by bringing post office on Core Banking System”. If substantial financial inclusion is to be attained through post office, which is capable of changing the game for Indian social safety nets including MGNREGA, the whole idea of the post office will have to be revisited.
E-FMS, A non-traceable system: E-FMS has been able to solve the problem of fund crunch at panchayat and block level through payments from a centralized account of District Program Coordinator. This has made the work of the functionaries at panchayat level easier as they do not have to run around the banks in getting drafts made and following up on fund transfer in every stage to ensure faster payment of wages. This has allowed functionaries to give more time to other important activities in the program. However, sometimes FTO takes a lot of processing time (sometime as much as two months) for the amount to be credited in the PO account after it is submitted from the block. The more pertinent problem is that the system has become completely opaque for the panchayat and block level functionaries. Since the present system is not –traceable, once the FTO is sent for processing it becomes difficult to speed up the process by following it up. During an FGD, it was expressed by functionaries that there were certain FTO’s that were taking more time than usual, however the functionaries had no idea, whom to approach in this regard.

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Communication channels: It was noticed during the study that although more than fifty percent workers interviewed had a mobile phone, less than five percent read Short Messaging Service (SMS)’s on their phones. Therefore, word of mouth still remains the major channel of information. More than 90 percent of the workers interviewed, confirmed the fact that the information related to government schemes as well as financial transactions like whether the account has been credited or not, is passed on majorly
through PRI members and government functionaries. Aadhaar based systems promise high traceability
of transactions and audit trails. However, this information still remains inaccessible to the target population. This system relies heavily on the electronic and mobile communication channels like SMSs and e-mails, therefore alternative communication channels will have to be soon given a thought.
Other implementational issues in MGNREGA: According to the operational guidelines of MGNREGA, the muster roll is supposed to be filled on the basis of measurement. It was noticed in the FGD’s that since the block and district administration is short of junior engineers, the E- muster roll is usually filled by the mate on the basis of a pre estimate of the scheme. Sometimes, the actual measurement is booked by the Junior Engineer more than 3 months after the actual E- muster roll is filled. Let us assume for a worksite of an irrigation well E- muster roll is filled on the 7th day and measurement is done after two months. If due to rain the well collapses in this period, it will make it impossible for the engineer to fill the measurement book. If the work has not been up to the mark and the muster roll is already filled, either the budget shoots up or there is a compromise in the quality of work by the functionaries.
The schedule of rates in MGNREGA in Jharkhand is less compared to the market. For e.g. a brick which can be purchased in MGNREGA for Rs. 3.5 is available at a price of not less than Rs. 5 in open market. This opens an excuse of corruption in the functionaries in the name of ‘management’. Mate often gives excuse to the monitoring agencies that if they do not siphon off money in the name of fake workers, how will they compensate for the schedule of rates. If wages are paid through AEPS, this leakage can be reduced as the channel of withdrawing wages of such fake workers can be closed.
The awareness about the provisions of MGNREGA in the workers, still remains a challenge. Ninety five percent of the workers said that they cannot ask for work from the government, they get work only when some irrigation well or pond is being made. Only 16 percent workers had participated in any MGNREGA Gram Sabha in past 3 months23. Ninety one percent of the workers interviewed said that it is not necessary that they will get work if they asked for it. Although, more than 90 percent of workers felt that they should get payment within 7 days of doing work, none of them were aware that they are supposed to be paid wages in a maximum of 15 days. This is made obvious by the fact that 77 percent workers said that they usually get paid in more than 25 days after work and 13 percent said that they get paid in 15-25 days. Only one worker said that he has been paid within 15 days. None of the workers interviewed had heard about social audit.
11. Conclusion
23 In the district of Ranchi, Gram sabha is supposed to happen every month on 26th. The GPS showed register entries to prove that gram sabha thrice in past three months.

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India is witnessing a change in the welfare paradigm where welfare is started to be seen as an entitlement rather than a service. With MGNREGA, GoI took the first step toward this change by designing National Employment Guarantee as an Act and not a scheme. The Food Security Act has also been passed by the parliament of India signifying the fact. However, the governance is not able to keep pace with the enforcement of these entitlements as the scale of operations is too large. The enforcement agencies often find themselves in a situation of repudiation. The government records say that the entitlement has been delivered, however, the receiver of the entitlement denies it. In times like this, it is very important to have tools that can provide a valid proof of the delivery of these entitlements and also give a tool for accountability and transparency in the hands of implementers as well as target population. Workers who are collecting wages after a biometric authentication, get a sense of satisfaction by this process and the implementation agencies get a valid proof that the wages have been collected. With proper implementation, Aadhaar linking to MGNREGA can solve this issue to a large extent.
The study finds that the amongst the two models of Aadhaar linked MGNREGA, India post model has been able to gather much success and has proved to be a useful systems as it works on the principles of interoperability that was missing in the BC model. The usefulness is increased by the fact that this model enables India Post to carry out financial transactions faster, in a professional and systemic manner. For MGNREGA workers Aadhaar or no Aadhaar does not matter. For them, what matters is timely payment of wages and full payment of wages. The workers who were able to collect (easy biometric authentication) their wages through this system are happy with this system primarily for two reasons: The distance they have to travel is quite less and the POS device speaks the withdrawal amount which tells most of the illiterate workers the amount of money they should get. The pilot of providing POS to the post master has considerably lowered the time for crediting of account of the worker and has had a positive effect with this regard.
India post, with its huge reach to unbanked population can play a pivotal role in this country. Aadhaar can be instrumental in taking post office to the level of commercial banks. However, this can happen only when the way rural poor think about post offices is changed, altough in the context of financial inclusion, the system of Aadhaar should not become a tool of exclusion rather than a tool of inclusion. Authentication mechanism for withdrawing their wages or doing any kind of banking transactions for that matter should be left to the choice of people. When the urban customers have a choice to do transactions with a debit card and a pin, why should one treat the rural customers any differently? Aadhaar enabled systems may be designed in a way that workers and other customers find it easy and choose it as a convenience rather than an obligation.
The concept of Aadhaar linking to MGNREGA seems to be a promising concept which is capable of handling implementation of huge scale but is subjected to multiple prerequisites at the same time. The approach of the system in full filling these prerequisites has been haphazard. The systems practiced by Aadhaar are themselves in an evolving phase. The details of the resident’s social security schemes like job card number was not collected at the time of enrollment. The exercise of enrollment involved cost of the government and time of the resident to get enrolled. In the present context, there is Aadhaar database and a MGNRGEGA database which needs another mammoth exercise of seeding to get

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connected. There have been examples where biometric attributes were not captured properly during the time of enrollment of the resident. Formal mechanisms for addressing issues like these are still in evolving phase.
The approach of linking MGNREGA to Aadhaar can be seen as a process in hurry and not very well planned. The emphasis has been on the end result and not the process itself. This can be seen through multiple examples where the functionaries were asked to collect Aadhaar first at bank or PO account numbers, and then were asked to verify the same. All three processes followed one another whereas they could have been done simultaneously. Sometimes, the functionaries are asked to get the accounts of workers shifted to banks from the post office like in the case of Pilot 1 where accounts were opened in banks. Later, when it did not work, the accounts of workers were shifted back to post offices. This in turn has created a lot of pressure on the existing system of MGNREGA as all these tasks were performed by the existing functionaries. As rural poor is the beneficiary of multiple social security nets, it might be a good idea to have Aadhaar Mitra’s (Aadhaar friends). These Aadhaar Mitra’s can carry out all the work related to seeding, mapping, updating of databases and also help the rural poor in various activities linked to Aadhaar. A suitable business model related to this can be worked out by UIDAI to this effect. This might also help Aadhaar to get the vital information to the target population.
The channel of communication Aadhaar relies on, does not seem to work well with the rural population. This has also created plethora of misinformation about Aadhaar. Since there is no fixed time of crediting the wages in workers account, the only channel of communication to inform workers that the money has been credited in their account, is the mate. One may ask the question though, that in the little amount of money that the mate is paid (1 man day against 40 man days of work) what incentive guides him/her to do so much work? Moreover, this automated process (E-FMS as well as PO account crediting in the Pilot 2) has turned into a non-traceable system for the field functionaries. The functionaries neither have control, nor traceability about the status of transaction in this system nor hence are not able to figure out or follow up on the cause of delays.
For the think tanks who conceived the idea of Aadhaar, it might have been very clear what they wanted to do by linking it with various social security nets. As the time progressed and there were more players and stakeholders introduced into the concept, which led to a rapid expansion of the idea. However, these ideas may not have been communicated to the field level functionaries properly as a thought. Not knowing its usage, it was more of instructions that they were following which in turn reduced their ownership of the idea. Aadhaar and its applications follow a technical architecture, it might have been perceived that the people who will use it do not need to know the nitty-gritty. But without complete knowledge, how were the ground level functionaries supposed to be involved or implement it successfully? As almost two years have passed since the first pilot, the researcher was expecting that there will be a considerable amount of clarity among the ground functionaries (GRS, GPS etc.) on the positives and negatives for Aadhaar based systems of payments. This hypothesis fell flat on its face as the clarity among the ground functionaries was almost negligible. On enquiring in all the FGD’s with the ground functionaries, whether Aadhaar linking to MGNREGA will make the process faster and transparent, the answer was “nobody knows for sure”. Although, the workers and functionaries are adapting fast in operating the machine and getting used to the system of authentication, their

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participation and knowledge of Aadhaar and Aadhaar enabled system is very limited. This has prevented both, workers and functionaries, to get involved in the success of the idea.
Aadhaar might not be the panacea of all problems in delivery of services and implementation of social security nets, but can be used as a powerful tool. Aadhaar should not turn into the primary engine driving MGNREGA or any other social security scheme. It was noted in the study that in the process of linking of Aadhaar to MGNREGA, Aadhaar might have become the primary driver of MGNREGA and not vice versa. The process of linking of Aadhaar to MGNREGA can yield results that facilitate employment generation for rural population only if it gets carried out in a well-planned manner, in a timeline which is practical and implementable. There are other processes like participatory planning and people’s involvement in the program that needs to be leveraged and paid equal attention to ensure that MGNREGA satisfies its primary mandates of livelihood generation and sustainable asset creation so it may stay a lucrative option for the rural poor.

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