AADHAR
AND WELFARE POLICIES - POLITY
News:
The concerns of using
Aadhaar in welfare schemes | Explained
What's
in the news?
●
On September 21, international credit
rating agency Moody’s Investor Service released a report, ‘Decentralised
Finance and Digital Assets’, which advocates for decentralised digital identity
systems instead of centralised biometric systems like India’s Aadhaar.
Key
takeaways:
●
Referring to “security and privacy
vulnerabilities posed by centralised ID systems like Aadhaar”, the report
states “the [Aadhaar] system faces hurdles, including the burden of
establishing authorisation and concerns about biometric reliability.”
Government
Response:
●
The government has strongly refuted these
claims.
●
Terming Aadhaar as “the most trusted
digital ID in the world,” the government stated that “it is evident that the
authors of the report are unaware that the seeding of Aadhaar in the MGNREGS database
has been done without requiring the worker to authenticate using their
biometrics, and that even payment to workers under the scheme is made by
directly crediting money in their account and does not require the worker to
authenticate using their biometrics.”
Objectives
of Aadhaar:
1.
Unique Identification:
●
Aadhaar is a unique identification number
provided to all Indian residents by the Unique Identification Authority of
India (UIDAI).
●
It collects demographic details, biometric
fingerprints and iris scans during enrolment, aiming to create a unique
identity for residents.
2.
Fighting Corruption:
●
Aadhaar’s primary objectives include
curbing corruption in accessing welfare programs by eliminating “ghost” and “fake” individuals who fraudulently claim
benefits.
Aadhaar’s
Role in Welfare Programs
1.
Ration Distribution:
●
Aadhaar is used to authenticate
individuals accessing rations under the Public Distribution System, ensuring
that beneficiaries receive their entitled portions.
2.
Government-to-Citizen Transfers:
●
The government employs Aadhaar for various
cash transfer programs, claiming substantial savings by eliminating fraudulent
beneficiaries.
Aadhaar
in Cash Withdrawals:
1.
Authentication Process:
●
To enable payments through Aadhaar for
MGNREGA, three steps are involved - linking Aadhaar to job cards, linking
Aadhaar to bank accounts and linking Aadhaar correctly with the National
Payments Corporation of India for payment processing.
2.
AePS Platform:
●
Aadhaar-enabled Payment System (AePS)
allows individuals to withdraw money from Aadhaar-linked bank accounts using
biometric authentication.
Concerns
Surrounding Aadhaar:
1.
Quantity Fraud:
●
Critics argue that Aadhaar fails to
address issues like quantity fraud, where beneficiaries receive less than their
entitled share. This type of corruption remains prevalent, with Aadhaar unable
to detect or prevent it.
2.
Authentication Challenges:
●
Rural areas face authentication challenges
due to unreliable internet, fading fingerprints and inadequate phone
connectivity for OTPs.
●
Vulnerable groups, such as older women and
people with disabilities, face exclusion.
3.
Lack of Data Transparency:
●
Information regarding authentication
attempts and failures is not publicly available, hindering transparency.
4.
Payment Failures:
●
Errors at any stage of Aadhaar-based
payments can lead to payment failures.
●
Mismatches in data between job cards and
Aadhaar databases can result in authentication failures.
5.
Misdirection of Payments:
●
Misdirected payments through Aadhaar are
difficult to detect and resolve, creating issues when Aadhaar numbers are
linked to the wrong bank accounts.
6.
Financial Exclusion:
●
Critics argue that Aadhaar-based
authentication requirements can lead to financial exclusion for certain groups.
Security
Concerns:
1.
AePS Accountability:
●
Banking correspondents using AePS operate
without accountability frameworks, leading to potential misuse and unauthorized
access to bank accounts.
2.
Multiple Authentications:
●
Some banking correspondents ask
individuals to authenticate multiple times, providing them access to
individuals’ bank accounts without consent.
3.
Fraud and Scams:
●
Several reports highlight instances of
money withdrawal and enrollment in government programs without individuals’
knowledge through AePS.
Current
Impasse:
1.
Resistance to Mandatory Aadhaar:
●
The government’s efforts to make
Aadhaar-based payments mandatory in MGNREGA have faced resistance from workers
and field officials.
2.
Deletion of Job Cards:
●
Reports indicate that the job cards of
active rural workers have been deleted on grounds of being “ghosts,” raising
concerns about data accuracy.
3.
Apprehensions:
●
Critics express apprehensions based on
their experience with Aadhaar in welfare programs, emphasizing the need for
pilots and evidence-based decision-making.
The debate between
centralized biometric systems like Aadhaar and decentralized digital identity solutions
remains ongoing, with concerns regarding security, inclusivity, and
transparency at the forefront of discussions.