The Unique Identification Authority of India (UIDAI), entrusted with the task of providing identification numbers to all residents, had a brush with controversy last week. Newspaper reports said that the expenditure finance committee of the finance ministry had slashed its budget by more than half, to Rs 3,000 crore. The implication of the reported cut was that the Authority would be able to issue only 100 million unique identification numbers, compared to 600 million numbers originally planned for the first phase.
The facts, however, are somewhat different. First, the expenditure finance committee does not have the final power to cut the budget of an Authority, created under an Act of Parliament. It certainly has the power to recommend cuts, but that is not the same thing. Finance Minister Pranab Mukherjee said as much by issuing a statement yesterday, reiterating his ministry’s commitment to provide all funds required for the expeditious and smooth implementation of the UID project. Secondly, there is no change in the plan for rolling out the identification numbers over the next four years, according to which the Authority would issue 100 million numbers by February 2011 and another 600 million by 2014.
Yet, it would be naive to conclude from the finance minister’s clarification that all is well with the UID project and that the controversy over its implementation has been resolved. The controversy arose from the manner in which the Authority proposed to register people, particularly those falling below the poverty line, before allotting them identification numbers. Finance ministry officials have argued that since the Registrar General of India (RGI) is collecting demographic and biometric data, the Authority need not undertake this exercise as it would lead to duplication of efforts. The Authority, on its part, has argued that it could not rely only on the RGI and it would collect such data independently from areas which the RGI cannot reach. Another area of conflict pertains to the Authority’s proposal to pay Rs 100 to every poor person who registers her name with it for getting an identification number. The ministry has questioned the need for paying the incentive to people for getting a number that should be incentive enough since it would entitle them to a host of financial and non-financial benefits. Should the government, therefore, pay out Rs 12,000 crore for allotting identification numbers to all residents, the ministry has asked. The Authority has argued in favour of the incentive on two counts. One, the payment of Rs 100 per person will be restricted only to the poor. Two, the amount involved is reasonable and fair compensation for a poor person who will lose a day’s earnings when she comes to get enrolled for the number.
There is no doubt that any payment of incentive to people for getting enrolled for the identification number should be subjected to strict scrutiny. However, for a scheme that has the potential of saving thousands of crores of rupees by eliminating ghost beneficiaries, the proposed payment of incentive money to the poor is worth the investment.
