Journal 2018 (Publication 2)
International Peer-Reviewed Journal
RESEARCH HORIZONS, S.R. NO. 2, VOL. 8 NOVEMBER 2018
A STUDY OF AADHAR SEEDING IN PUBLIC
DISTRIBUTION SYSTEM: EXPANSION AND OUTREACH
Ms. Zeba Shaikh*
ABSTRACT
Public distribution of food grains was retained as a deliberate social policy by India, when it
embarked on the path of a planned economic development in 1951. Before the 1960s, distribution
through PDS was generally dependent on imports of food grains. It was expanded in the 1960s
as a response to the food shortages of the time; subsequently, the government set up the
Agriculture Prices Commission and the Food Corporation of India to improve domestic
procurement and storage of food grains for PDS. In 1997, the government launched the Targeted
Public Distribution System (TPDS), with a focus on the poor and providing them subsidized
food through a network of ration shops. The recent changes in improving and making PDS
more effective is introduction of Aadhar-based biometric authentication (ABBA) on PDS.Aadhaar
Linked and digitized ration cards allow online entry and verification of beneficiary data thereby,
enables online tracking of monthly entitlements and off-take of food grains by beneficiaries.
Linking of Aadhar to the PDS has caused serious effects in many parts of the country. People in
interiors of the country were deprived from the access to food grains because of technical error,
transaction failure due to missing names confusion of bogus ration cards, etc. The study aims
to identify the problems associated with linkage of Aadhar and PDS.
Introduction
Food security implies access by all people at all times to sufficient quantities of food to lead an active
and healthy life. As noted by P.V. Srinivasan, this requires not just adequate supply of food at the
aggregate level but also enough purchasing capacity with individual/household. Because of chronic
food shortages that the country is facing, the focus of Government is to provide food-based safety
nets. The Government of India has implemented three food-based safety nets
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Public Distribution System
Integrated Child Development Services
Mid-day Meals
Food Security at a glance
PDS in India
The basic objective of the PDS in India, is to provide essential consumer goods at cheap and subsidized
prices to the consumers so as to insulate them from the impact of rising prices of these commodities
and maintain the minimum nutritional status of our population. To run this system, the Government
resorts to levy purchases of a part of the marketable surplus with traders/millers and producers at
procurement prices. The grain (mainly wheat and rice) thus procured is used for distribution to the
consumers through a network of ration/ fair price shops and / or for building up buffer stocks.
The main agency providing food grains to the PDS in Food Corporation of India and its primary duty
is to undertake the purchase, storage, movement, transport, distribution and sale of food grains and
other food stuffs.
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PUCL vs. Union of India, 2001
RESEARCH HORIZONS, S.R. NO. 2, VOL. 8 NOVEMBER 2018
In 2001, the People’s Union for Civil Liberties (PUCL) filed a writ petition in the Supreme Court
contending that the “right to food” is essential to the right to life as provided in Article 21 of the
Constitution. During the ongoing litigation, the Court has issued several interim orders, including the
implementation of eight central schemes as legal entitlements. These include PDS, Antyodaya Anna
Yojana (AAY), the Mid-Day Meal Scheme, and Integrated Child Development Services (ICDS). In
2008, the Court ordered that Below Poverty Line (BPL) families be entitled to 35 kg of food grains per
month at subsidized prices.
National Food Security Act, 2013
The National Advisory Council (NAC) submitted its proposal on Draft National Food Security Bill in
January 2011 and recommended the shifting from household food entitlements to individual food
entitlements.
The NFSA, 2013 seeks to provide for food and nutritional security in human life cycle approach by
ensuring access to adequate quantity of quality food at affordable prices to people to live a life with
dignity and for matters connected therewith or incidental thereto”. NFSA was signed into law on Sep
1
2, 2013.
Imposition of Aadhaar-based biometric authentication (ABBA) on the PDS is the latest move in the
PDS reforms. This new system was first introduced in Ranchi district, Jharkhand (2016) and created
series of problem in access to the PDS that provide a modicum of food and economic security in the
uncertain lives of poor.
Objective of the study
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To study the impact of Aadhar implementation in PDS in India.
To study the issues related to Aadhar seeding in PDS
To identify the problems in the process of linking ABBA(Aadhar Based Biometric Authentication) to
PDS
Highlights of linking Aadhar to PDS
When it was first launched in 2009, Aadhaar signaled a promise to repair the corroded plumbing of
India’s leaky public delivery systems. The unique biometric identity would help reduce duplicate and
ghost entries in the list of beneficiaries of government schemes, and pave the way for direct benefit
transfers to them eventually, the then government claimed.
Eight years after its launch, and more than a billion Aadhaar registrations later, much of that promise
remains unmet even as the project remains mired in a number of controversies. The Aadhaar project
has survived a change in government but has met with a rising tide of questions from the Supreme
Court, the national auditor, and from the civil society at large.
Why has the dream turned sour? A survey of the existing research on the subject suggests four key
reasons.
First, the Aadhaar project seems to have been launched and executed without adequate legal
safeguards on the storage, usage, and distribution of data of citizens, and with limited scope for
redresses. The risks of abuse have been constantly understated by policymakers. The ambiguous
stance of the Unique Identification Authority of India (UIDAI), which runs Aadhaar, and the government
as a whole, on privacy concerns, has not helped inspire confidence in the project.
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RESEARCH HORIZONS, S.R. NO. 2, VOL. 8 NOVEMBER 2018
Second, there does not seem to have been a rigorous attempt to perform an independent cost-
benefit analysis either before or after the launch of the project. The results of pilot projects—which
suggested several challenges—did not seem to have any impact, and there was little attempt to
even fix criteria for evaluating the project. Various claims about public savings from linking Aadhaar
to various beneficiary databases have emerged but as we shall see, they rest on weak evidence.
Third, the sequencing of steps required to implement an Aadhaar-based payment and direct benefit
transfer (DBT) architecture did not receive the attention it deserved, leading to debilitating challenges
as the project gets universalized. The issue of implementing cash transfers in a country such as India
is a separate and complex issue in itself, and one that an earlier instalment of Economics Express dealt
with.
Finally, the mindless expansion of Aadhaar linkage to schemes or areas where there is limited scope
for leakages at a time when several problems have emerged regarding such linkages have only
served to weaken the original premise of Aadhaar: That of being an effective instrument in targeting
leakages. Had the linkage been restricted to a few key programmes, and the evidence regarding
such linkages carefully examined and analyzed, the response to the Aadhaar project would have
been quite different from what it is now.
Ground reports from different parts of the country seem to suggest significant exclusion errors of
genuine beneficiaries in Aadhaar-linked schemes.
One recent field study published in the Economic and Political Weeklyinvestigated the implications
of linking the public distribution system (PDS) for food grains in Hyderabad with Aadhaar.
Based on an interview of 80 households, the study found that 66% of these households reported
issues with the technology including fingerprint authentication errors, Aadhaar seeding issues, and
poor connectivity.
The Economic Survey 2016-17, which is otherwise very gung-ho about the Aadhaar project, noted
the high rates of authentication failures in several states. According to a more recent report on the
state of Aadhaar by Ronald Abraham and co-authors published recently by IDinsight, an international
development consulting organization, between April 2015 and March 2017, the pension programme
in Andhra Pradesh reported fingerprint authentication failure for 17.4% individuals, despite three
attempts. Similarly, the failure rate averaged 7.8% for the Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS) in Telangana. These estimates indicate the upper bound of
authentication failures rather than actual failures because some of these “failures” might be because
of people trying to fraudulently access benefits (which is what the authentication is supposed to
prevent). Nonetheless, these estimates suggest that genuine exclusion errors may be far higher than
what was originally anticipated. In 2011-12, when the UIDAI tested authentication processes, it
expected only 1% of beneficiaries to face such difficulties, the report notes.
Problems and Challenges
Aadhaar is claimed to provide identification to more than 1.2 billion Indian residents, or more than
9
0% of India’s population. However, a study report from three states, Andhra Pradesh, Rajasthan,
and West Bengal, reveal that almost 20 lakh people were denied food distributed through public
distribution system (PDS) or ration shop due to Aadhaar. In addition, it also raises question about the
government claims on savings of Rs83,000 crore due to Aadhaar. The report also found that majority
of the respondents care about their right to privacy and how their Aadhaar information is used by the
government.
According to the “State of Aadhaar Report 2017-18” prepared by IDinsight, and sponsored by Omidyar
Network, exclusion from food ration (PDS) due to Aadhaar-related factors is significant. “Exclusion
from receiving benefits due to Aadhaar-related factors significant 0.8%, 2.2%, and 0.8% of PDS
beneficiaries in rural Andhra Pradesh, Rajasthan, and West Bengal, respectively, are excluded from
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RESEARCH HORIZONS, S.R. NO. 2, VOL. 8 NOVEMBER 2018
their entitlements due to Aadhaar-related factors. This extrapolates to 20 lakh individuals monthly.
However, non-Aadhaar reasons, such as ration unavailability, contribute much more to exclusion
from,” the report says.
While Aadhaar-related reasons include, Aadhaar seeding, Aadhaar authentication failures, non-
availability of point of sales (PoS)-able member and e-PoS connectivity or electricity issues, non-
Aadhaar related reasons include, non-availability of ration and other reasons such as dealer not
being present.
o Unsubstantiated claims of saving due to Aadhaar
The Government of India claims that Rs83,000 crore ($12.5 billion) has been saved in four years from
FY2014-15 to FY2017-18 because of Aadhaar, direct benefit transfer (DBT), digitization, and other
initiatives. The main source for savings is deletion of fake, duplicate, or ineligible accounts. For a
breakdown of the savings figure, along with data on the corresponding number of non-genuine
programme beneficiaries deleted.
o Updating Aadhaar is lifelong process
According to IDinsight, people in the three states, where it conducted its survey, faced greater
challenges when fixing mistakes or updating information. It says, “Updates will be required as long
as the system is in place. As the administrator of the world’s largest biometric database, the UIDAI
will face significant challenges ensuring Aadhaar data remains current and updated. A system
containing errors is likely to cause problems, ranging from minor inconveniences to serious threats of
exclusion.”
Another big challenge is biometric mismatches of genuine beneficiaries when their fingerprints no
longer match with what is recorded on the central database. The hands of the daily wage earner are
too chafed and the biometric doesn’t work; they are asked to apply vaseline and wait for days before
they can avail benefits.
There was one attempt at a cost-benefit analysis of the Aadhaar project by a research group at the
National Institute of Public Finance and Policy (NIPFP), funded in part by the UIDAI itself. The study
estimated that utilizing Aadhaar for schemes such as PDS and MGNREGS could help the government
save at least a tenth of the amount spent on these schemes. But a rebuttal by development economist
ReetikaKhera pointed out that the estimates are based on old data on leakages, and over-stated
assumptions about ”ghost beneficiaries”.
The Parliament once asked for a full-fledged analysis of the Aadhaar project. Sadly, there is very little
data that the government has shared in this regard, and hence there is little information on the
economic returns from the project.
The lack of evidence-based policymaking has meant that the project has run ahead without adequate
course corrections, and those pointing out flaws or challenges have either been ignored, or silenced.
Most policymakers have tended to underplay the concerns about data fraud and data breaches. But
the human and financial implications of such breaches in the digital age are not trivial.
Often comparisons are made with the social security number (SSN) system in the US but the SSN
contains far less information, and is linked (or can be linked) to far fewer databases than is the case
with Aadhaar. Yet, identity theft involving SSN numbers costs billions of dollars annually in the US,
and these costs have been rising over time, as the digital transformation sweeping the world has
made it easy to link different sets of data and the personal information of victims. The dangers of
abuse by the state surveillance machinery, or by rogue officials, are also very real in the case of
Aadhaar.
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Conclusion
RESEARCH HORIZONS, S.R. NO. 2, VOL. 8 NOVEMBER 2018
The Imposition of ABBA on the PDS seems to be a case of “pain without gain”. On one hand system
has led to serious exclusion problems (particularly for vulnerable groups such as widows, the elderly
and manual workers) as well as higher transaction cost. On the other, it has failed to reduce quantity
fraud, which is the main form of PDS corruption. Nor it has helped to address other critical shortcomings
of the PDS, such as the problem of missing names in the ration cards, the identification of Antyodaya
households, or the arbitrary power of private dealers.
In response to the public outcry that followed recent starvation deaths in many parts of the country,
the central government recently issued an order (on 24 October 17) directing state governments to
ensure that those for whom ABBA does not work are able to buy their PDS rations using an “exemption
register”.
Technological advancements help us to improve current pattern of living, here the imposition of
technology(in terms of digitizing PDS) has proved to be more harmful rather than benefitting.
References
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Dreze, Khera, Khalid, Somanchi. (2017). Aadhar and Food Security.Economic and Political
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Lecturer, Maniben Nanavati Women’s College, Email: [email protected]
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