Why India's first Aadhaar holder is now locked out of welfare schemes

This issue is rooted in deeper structural problems with the Aadhaar-based Direct Benefit Transfer (DBT) system, which has suffered from technical glitches, exclusion errors, and lack of accountability

Fifteen years after she became the first Indian to be issued an Aadhaar card, Ranjana Sonawane is unable to access basic government welfare meant for her. The 54-year-old resident of Tembhli village in Maharashtra’s Nandurbar district has been locked out of the state’s Ladki Bahin scheme, despite her Aadhaar being linked to a bank account, according to a report by The Times of India.

 

Government officials insist that the ₹1,500 monthly stipend under the scheme is being deposited, it said. Yet, Sonawane has not seen a rupee. Her family’s repeated visits to banks and local authorities have revealed that the account receiving the funds may not even be in her name — or worse, is a joint account that she cannot control.

 

 

Sonawane’s case highlights a disturbing pattern in rural Maharashtra, where technical and bureaucratic glitches in Aadhaar-linked bank accounts are blocking thousands of women from receiving welfare benefits, according to the report. Her situation is particularly ironic: in 2010, she became the face of India’s Aadhaar rollout — a digital identity system that promised to streamline access to government subsidies and welfare schemes.

 

But more than a decade later, the system seems to be failing those it was meant to empower. And Sonawane’s fading public memory stands in stark contrast to the daily reality of navigating a digital welfare infrastructure that remains opaque, error-prone, and inaccessible for many.

 

It is important to note that the Aadhaar project cost the Indian government roughly between ₹11,000 crore to ₹13,600 crore up to around 2019, with ongoing expenditures continuing beyond that period.

 

Is Aadhaar-based direct benefit transfer system efficient?

 

This issue is rooted in deeper structural problems with the Aadhaar-based Direct Benefit Transfer (DBT) system. Though it was introduced to improve transparency and efficiency in welfare delivery, the DBT mechanism has suffered from technical glitches, exclusion errors, and lack of accountability.

 

Studies show that nearly 73 per cent of surveyed DBT recipients have experienced payment processing issues. Aadhaar seeding errors, such as linking Aadhaar to the wrong bank account or multiple accounts, account for about 18 per cent of such failures. In schemes like PM-Kisan, over half the payment failures are directly tied to Aadhaar-related mismatches.

 

The lack of transparency in how Aadhaar is mapped to accounts further compounds the problem. Beneficiaries rarely know which of their accounts is active under the Aadhaar Payments Bridge System (APBS), which uses the Aadhaar number as the financial address instead of a bank account number. This system is managed by the National Payments Corporation of India (NPCI), which alone has access to the linkage data.

 

In the case of Ranjana and many others, this has meant being locked out of benefits with no clear way to seek resolution.

 

Why did Maharashtra cut the amount of Ladki Bahin scheme?

 

Even as individuals face hurdles accessing entitlements, the Ladki Bahin scheme itself is under financial and administrative stress. In a cost-cutting move, the Maharashtra government recently slashed the stipend from ₹1,500 to ₹500 for 800,000 women who were also beneficiaries of the Namo Shetkari Mahasanman Nidhi (NSMN). The government argues that the cumulative monthly benefit under multiple schemes should not exceed ₹1,500.

 

Of the 26.3 million women who applied for the scheme in 2023, a verification drive slashed that number to 2.46 crore. Another 1.5 million names were removed after further scrutiny in February and March. While state officials say this is part of efforts to clean the beneficiary list, activists argue the process has disproportionately affected the poor and digitally illiterate — those least equipped to navigate Aadhaar-related errors.

 

Meanwhile, the scheme itself is facing tighter purse strings. With Maharashtra’s projected debt touching ₹9.3 trillion for 2025–26, the state government has cut the Ladki Bahin budget from ₹46,000 crore to ₹36,000 crore.