'Aadhaar-based cash transfer benefits to rise gradually'

The government is set to launch Aadhaar-based direct cash transfer scheme from January 1 in 51 districts. As the countdown to independent India’s most ambitious govt scheme begins, Business Standard would, through a series of reports starting today, capture the prospects as well as bottlenecks associated with the implementation

The Aadhaar programme, on the back of which the government wants to implement its ambitious cash transfer regime starting January 1, could yield an internal rate of return of 52.85 per cent, according to an analysis by the National Institute of Public Finance and Policy (NIPFP).

It estimates the cost of implementing the Unique Identification Authority of India (UIDAI)-led initiative and integrating it with existing government programmes — including the Public Distribution System (PDS), the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), fertiliser and LPG subsidies, Sarva Shiksha Abhiyan and Mid-day Meals, Indira Awaas Yojana, Janani Suraksha Yojana, Accredited Social Health Activis, Integrated Child Development Scheme, pensions and scholarships — would amount to Rs 37,186 crore.

 

Overall, the analysis says the cost of the Aadhaar scheme will double from Rs 2,265 crore in 2012-13 to Rs 4,835 crore by 2020-21. And, that the benefits will trickle in at Rs 425 crore in 2012-13 and eventually rise spectacularly to Rs 25,100 crore by 2021.

Across the board, the NIPFP suggests Aadhaar would be able to plug significant amounts of leakages in these government programmes — 8.3 per cent for the PDS, five per cent of the MGNREGS wage disbursement and seven to 10 per cent of the fertiliser and LPG subsidies.

However, the NIPFP report admits to a lack of comprehensive data and studies for a number of the schemes it has analysed. It remains unclear how these projections will fare if the government introduces the cash transfer regime in a staggered manner.

From January 1, Aadhaar-enabled transfers for 29 schemes will begin in 51 districts, with full coverage targeted by April 1, 2014, according to the schedule cleared by Prime Minister Manmohan Singh. Eighteen states have to be covered by April 1.
 

COST-BENEFIT ANALYSIS OF AADHAAR Benefits                                                                                                                 (Rs crore at constant prices)
	2011-12	2012-13	2013-14	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21
Roll-out (%)	0	2	5	10	20	40	80	100	-	-
MGNREGS	0	61	155	317	646	1,318	2,688	3,427	3,496	3,566
PDS	0	158	412	861	1,797	3,752	7,834	10,226	10,68O	11,155
Fertiliser subsidy	0	87	214	419	821	1,609	3,154	3,863	3,786	3,710
LPG subsidy	0	32	80	161	321	643	1,286	1,607	1,607	1,607
Education	0	50	127	259	528	1,078	2,199	2,803	2,859	2,917
Indira Aawas Yojana	0	18	47	95	194	396	808	1,030	1,050	1,071
Other schemes	0	18	47	95	195	397	810	1,032	1,053	1,074
# Till 2011-12, the actual costs are presented. For subsequent years, the estimated costs are considered