Several recent country level studies have demonstrated that the problem of leakage persists throughout the PDS system. This paper argues that biometric authentication (BA) technology associated with Aadhaar-based biometric identification has been able to reduce PDS leakages and can be applied to other social protection programmes as well.
Aadhaar-based biometric authentication (ABBA) is the process of using Aadhaar's biometrics and demography to authenticate an individual’s identity for delivering services. It aims to eliminate ghosts, duplicates as well as fake beneficiaries from accessing welfare benefits.
Since the authorization to each client was authenticated through ABBA, any misuse or leakages would lead to scrutiny and detection of beneficiaries by the bank. There was a direct change in daily transaction patterns and movement of grains from the godowns to the ration shops.
Aadhaar-based biometric authentications have shown to be hugely successful in providing beneficiaries with a convenient and user-friendly service. With the introduction of Aadhaar-based biometric authentication in Fair Price Shops (FPS), customers are able to buy their rations in a matter of minutes instead of having to wait or depend on other alternatives.
The government of India has mandated the use of Aadhaar or National Population Register (NPR) numbers in addition to ration cards for disbursing subsidized food grains through the public distribution system. Linking Aadhaar to ration card holders enables the government to provide individual, rather than household entitlements. This makes allocations more transparent and also addresses the challenge of larger households receiving insufficient foodgrain.
Communities in both rural and urban India have turned to Right to Information (RTI), as well as public activism, in order to access FPS records and monitor the functioning of ration shops. Clear accountability through Aadhaar authentication, as well as the use of electronic records, make data more available for community monitoring and strengthen the use of RTI in checking diversion, exclusion, and malpractice.
A recent study based on randomised-controlled trial in Jharkhand found that Aadhaar-based biometric authentication (ABBA) by itself did not significantly change either leakage or the value of PDS goods received by households on average.
With a genuine beneficiary, ABBA actually makes quantity fraud easier. If the dealer is handed an ABBA slip with details of the next genuine person in the waiting line, he can quietly provide a lesser amount to that person. ABBA will ensure that the beneficiary on record receives his full entitlement, but by the time he reaches the front of the queue, his turn is over and the dealer's accomplice has already received his quota. So much for the idea that ABBA would make things fairer for genuine beneficiaries.
For the beneficiaries who had not linked an Aadhaar to their ration cards at baseline, ABBA reduced the value of benefits received and increased the fraction of beneficiaries receiving no benefits at all due to lack of Aadhaar linking.
The use of Aadhaar biometric authentication for transfers of welfare benefits has led to an exclusion error of a number of genuine beneficiaries. The coverage generated by the Aadhaar project has narrowed down to select schemes under the Direct Benefit Transfer (DBT) and linked with Aadhaar project.
Aadhaar-based biometric authentication generally costs beneficiaries more than the earlier system of paper coupons. The cost is borne by individuals even to access benefits worth only a few rupees, and the magnitude of these costs often exceeds the value of these benefits.
The implementation of the Aadhaar-based biometric authentication system will increase internet penetration as more and more people will be lured by this facility. The government is designing a cash transfer programme in which cash will be directly deposited in the bank accounts of beneficiaries of various welfare schemes launched by the government.
Universal basic income (UBI) is being talked about as a game-changer and a solution to end poverty. It enables the citizens to get a living income unconditionally by the government. The goal is to allow people, especially those in poverty, to have more freedom and to spend money where it is needed most. Other than Aadhaar, identity cards like voter can be used to link with PDS and provide benefit.
ABBA was initially designed to be a tool designed to make leakages in the PDS system as well as subsidy distribution. It is being currently used for prevention of duplicacy and identity fraud while distributing subsidies via the PDS. The Direct benefit transfer has come up as a policy framework in India with an aim to provide direct cash transfer to citizens.
