The way it should be

"It should not escape notice that gold and silver after circulating in every other quarter of the globe, come at length to be absorbed in Hinduston"

                         ~Francois  Bernier

Aadhaar: Boon or bane?

Posted by VASUDEVA REDDY on Monday, April 1, 2013 Under: economic articles

Politics or political views have never been my cup of tea, but this time i, at least, want to grab some other’s cup for time being. After all, we live in India, where stupidity is the only qualification for politics, in which i can pass in distinction. Moreover, the topic i want to deal with is not just political issues and it is more to economical one.

Aap ka paisa, aapke haath’, was the phrase coined by UPA govt indicating the mechanism of Direct Cash Transfer scheme


 

Does Overhyped Aadhaar will do any magic to change the lives of the poor, or will it chose the same path which all other schemes had chosen? Well, it is too early to say anything about the success of Aadhaar, Direct Cash Transfer Scheme (From here onwards i’ll mention DCTS, Yes! Im too lazy),  as they are yet to implement that, at least in a noticeable scale. The success of any scheme or system mainly depends upon the effective function of mediators. Fortunately or unfortunately, here the mediators are banks, precisely the public sector banks. Seeding of Aadhaar no for a particular account no dictates the success of DCTS.


 
Coming to internal mechanism how DCTS works, first a person has to buy goods from a ration shop with no subsidized price, and then the govt will credit the subsidy amount to the corresponding person’s bank account. In other words, Individuals have to submit photo copy of their Aadhaar card along with the bank account no to a dealer of any subsidized goods to avail DCTS. Every bank and branch has been instructed to seed the Aadhaar no for the account no’s. But there comes the main issue, most of the banks and branches have not yet seeded the same, you can trust me, im working with a public sector bank. So the very basic requirement for the success of Aadhaar is yet to be satisfied.

 

Forget the mediator role by banks, how many of Indians have got their Aadhaar cards by now? Maybe large in absolute terms, but quite a few when we compare with the total Indian Population. The spirit of Aadhaar had taken a hit when the Govt had cut the budget from 7500 crore to 4000 crore. One must agree that, collecting bio-metric information of 1.2 billion population is a Herculean task, and it needs huge chunks of money and the greatest efforts by everyone who has involved into that.

Let us safely assume that everybody got their Aadhaar no and every bank has completed seeding Aadhaar no with the account number, but how many villages in India has been covered by banks, Yeah! Here comes the fancy term ‘financial inclusion’. Though the every big head in the Indian financial system is shouting to their loudest volume about ‘financial inclusion’, one can see millions of villages that haven’t seen any bank. So, the person who has bought goods at non-subsidized price has to travel to the nearest town (where the banking business is available) to get that subsidy money, that to not instantly.

Finally, no, im not against DCTS, in fact, i would love to see how it performs. But i concerned about technical difficulties of implementations. We, Indians, are capable of finding loopholes to the strongest system possible. But the interesting question is, how they gonna do it. Of course, it is not mission impossible-5, but it certainly difficult

In : economic articles 


Tags: aadhaar aadhar direct cash transfer scheme upa financial inclusion 

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