| Updated: Aug 23 2014, 01:12 IST
SUMMARY
Given that both the Centre and states have now started working on Aadhaar-based cash transfers of entitlements, it will be good
Given that both the Centre and states have now started working on Aadhaar-based cash transfers of entitlements, it will be a good idea to re-look at some of the transformational benefits that can be achieved using the UIDAI platform. Rajasthan has already started registering people for rolling out entitlements through its Bhamashah scheme and the Prime Minister’s ambitious financial inclusion plan, Jan Dhan Yojana, will also be linked to Aadhaar.
While Aadhaar-based identification is expected to reduce leakages in the government’s social sector spendings, there is more that can be gained. A Barclays report points out that UIDAI can be effectively used to minimise tax evasion and tracking high-value transactions by linking bank accounts and PAN. This has the potential to add about 0.4% to the GDP annually. The reduction in government spending-related leakages could result in savings amounting to 0.2-0.3% of GDP.
Also, Aadhaar-based financial inclusion can help move savings away from gold to financial products, which could add up to 0.2% to annual growth. Aadhaar can improve the efficiency of government spending on education, healthcare and housing. The health records of individuals can be linked to Aadhaar and the database can be leveraged to ensure better health insurance coverage. It can also be used to monitor attendance of government teachers and doctors.