The UPA government's ambitious unique identification or Aadhaar project would result in saving of about R1,10,000 crore by 2020, around 58% of expenditure of major public welfare schemes, a Planning Commission study released on Saturday said.
The Prime Minister's Office had given April 2014 as the deadline for disbursing cash transfer through the UIDAI platform for all major government schemes.
A cost benefit analysis done by the National Institute of Public Finance and Policy (NIPFP) says the savings would come after plugging the leakage in the implementation of welfare schemes.
“The cost benefit analysis of Aadhaar is hampered by two problems. First, many gains from Aadhaar are difficult to quantify as they are intangible. The main benefit of Aadhaar is that it can make many of the existing government programmes more demand-led, empowering the beneficiaries to hold the programmes accountable for their entitlement,” said the study, released by Planning Commission deputy chairperson Montek Singh Ahluwalia and UIDAI chief Nandan Nilekani.
The institute examined 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 R2,00,000 crore annually.
In PDS, once beneficiaries are enrolled, 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 will reduce transaction costs involved in enrolling for a ration card in a new towns and villages, especially for migrants. “Such costs are expected to be driven down with a national identification mechanism and Aadhaar can play this role effectively,” it said.