The UPA government’s ambitious unique identification number project Aadhaar, would result in savings of about Rs 1,10,000 crore by 2020, around 58% of the expenditure of major public welfare schemes, a Planning Commission study released on Saturday said.
The Prime Minister’s Office had given April 2014 as a deadline for disbursing cash transfer through UIDAI platform for all major government schemes.
A cost benefit analysis done by National Institute of Public Finance and Policy (NIPFP) says the savings for the government would be by plugging the leakage in implementation of government welfare schemes.
"A full edged cost benefit analysis of Aadhaar is hampered by two problems. First, many of the gains from Aadhaar are difficult to quantify as they are intangible. A main benefit of Aadhaar is that it can make many of the existing government programmes more demand-led, empowering the beneficiaries to hold programmes accountable for their entitlement," said the study released by planning commission deputy chairperson Montek Singh Ahluwalia and UIDAI chairperson Nandan Nilekani.
The institute studies 11 major government schemes including Public Distribution System (PDS), LPG and Fertilizer subsidy, Mahatma Gandhi National Rural Employment Guarantee Scheme, pensions and scholarships costing government around Rs 2,00,000 crore annually.
In PDS, once beneficiaries are enrolled within the system, it becomes easier for them to claim their benefits because they can authenticate their presence as beneficiaries. It also reduces leakages due to better matching of supply with demand, the study said.
"Aadhaar will make the migration experience in search of jobs easier by giving an identity to migrants in their destination locations. Similarly, rights and entitlements can be decoupled from the location of the resident," the study said.
The study also said that Aadhaar enabled system will reduce transaction costs involved in enrolling for a ration card in a new towns and villages, especially for migratory labour. "Such costs are expected to be driven down with a national identification mechanism and Aadhaar can play this role effectively," it said.