India: UID - Five Myths

There are many misconceptions about the “aadhaar†number. Many people believe that this project is essential for poor people, better implementation of government programmes and so on. This note dispels these misconceptions using the government’s own data. Here are the five most popular myths.

1. The UID project will help give a valid ID to millions of Indians who do not have any ID.

According to a recent reply to an RTI query, only 0.03% of those who got an aadhaar number were people who had no ID before. The rest (99.97%) were enrolled with the help of existing IDs.

2. UID is necessary for reducing corruption in government programmes
Between 2004-5 and 2011-12, corruption in the PDS in several states has decreased. E.g., in Bihar it has come down from 90% to around 20%; in Chhattisgarh from 50% to 20%, in Odisha from 75% to about 25%. These improvements have come about without any use of aadhaar.

Similarly, in NREGA also, corruption has gone down. Earlier, close to half of the wages did not reach NREGA workers. This has come down: according to estimates using IHDS data, leakages are less than 5% now. Again, this has been achieved without aadhaar: payment of wages through bank and post office accounts has acted as a safeguard against corruption.

3. UID is necessary because there is a lot of duplication of names in welfare programmes

There is very little reliable data on duplication. In its report, the Dhande Committee report on DBT for LPG found that there were about 2% duplicate beneficiaries in the LPG database (p. 22). According to an affidavit submitted by the government to the Supreme Court, 2% duplicate job cards were detected in Andhra Pradesh. In the PEEP survey, we had found only one case of duplication (out of nearly 3800 beneficiaries) on the pension lists from ten states.

The size of the duplication problem remains a mystery. A cost-benefit study of UID by researchers from NIPFP was constrained to make a purely hypothetical assumption about duplication for their calculations.

4. The UID database is foolproof

In March 2015, in Parliament, a minister said that more than nine crore enrolment records were rejected due to quality issues and suspected fraud.

5. UID is necessary to proceed with “Direct Benefit Transfers†(DBT)
This is not true. For DBT, people need to have bank accounts. In fact, as government data below shows, DBT are doing quite well without aadhaar. In the case of NREGA, pensions etc, more than 90% of wages are paid through NEFT rather than the aadhaar-payment platform.

Source: Annexure-IV of Fund Transfer Report Of Direct Benefits Transfer (DBT) Schemewise as on 31.03.2015. Available online http://finmin.nic.in/DBT/DBTLannexure4_31032015.pdf