Streamlining the identification of beneficiaries in the targeted public distribution system (TPDS) in Karnataka through the introduction of Aadhaar (UID)

Abstract

This dissertation seeks to assess the role of AADHAAR (UID) in streamlining the Targeted Public Distribution System (TPDS) in India. The TPDS, implemented in June 1997, is one of the major schemes of the Government of India (GoI) to provide food grains to vulnerable poor people at subsidised rates. The GoI and individual States are bearing a huge subsidy burden to implement TPDS in the Country. However, due to erroneous identification parameters and malpractices within the system, it is difficult for the Government to identify genuine beneficiaries in the TPDS. This has resulted in exclusion and inclusion errors on a large scale, with the result that the haves are enjoying benefits that are meant for the poor sections of society. Below Poverty Line (BPL) cards are not only in great demand for obtaining food grains, but are also associated with 13 other kinds of benefits, such as scholarships, medical insurance, old age pensions, employment etc. The PDS has been in existence for over 60 years in some or other form; therefore, it is appropriate to study the challenges faced by the Government in identifying the right beneficiaries of the scheme. A study of this issue not only impacts the TPDS, but it also sets the groundwork for working out a strategy to design the identification mechanism for other social welfare schemes of the Government, such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Public Health, Education etc. In India, identification challenges are being faced not only by the poor, but also by the rest of the citizens. National Identification has been advocated for several decades. The GoI has set up the Unique Identification Authority of India (UIDAI) under the Planning Commission to issue a 12-digitAADHAAR number to identify each and every resident uniquely and unambiguously. The UIDAI is showcasing the TPDS as a major scheme which will be streamlined after partnering with AADHAAR.A review of the literature suggests that identification is a crucial aspect of our daily lives. In the case of the Government, it is convenient to identify, categorise and target people (intended beneficiaries) in order to impart benefits through social welfare schemes. However, in India, there is as yet no single nationally valid ID; instead, tens of different IDs, such as driving licenses, passports, Employee Provident Funds, BPLs and Permanent Account Numbers, are inexistence. It is a challenge for residents to prove their identity (especially poor people) as it involves huge transaction costs each time they go through the cycle of identification. With the aim of identifying BPL beneficiaries in a systematic way, the Ministry of Rural Development(MoRD) has conducted various BPL surveys for the rural population over the past two decades; however, for one reason or another, the results were no closer to the ground reality. Some international and national best practices are examined in this dissertation in order to understand the various ways (universal, self-targeting, un targeting and targeting) in which aright beneficiary may be identified. Sri Lanka gives us an insight into the success of food coupons. Kerala offers an excellent example of adopting a universal approach for efficiently handling PDS. Chhattisgarh is a successful example of adopting e Governance to streamline the TPDS with a targeted approach to identify a beneficiary. Andhra Pradesh suggests a successful implementation of Food Coupons under the TPDS. In this dissertation, the state of Karnataka was chosen as the Study State with regard to identification issues for the following reasons:1. The Department of Food, Civil Supplies and Consumer Affairs, Government of Karnataka (GoK), has identified beneficiaries in a very systematic way (via a door-to-door family survey in 2005).2. It is a pioneer in implementing an e Governance initiative in the TPDS in 2006 by capturing demographic and biometric data and creating a database of all the TPDSbeneficiaries.3. It has conducted a successful pilot on implementing Point of Sale devices in some Fair Price Shops (FPS) for individual beneficiary tracking.4. It has taken several steps to streamline the TPDS in the State. However, despite all the above stated measures by the Department of Food, Civil Supplies and Consumer Affairs to streamline the TPDS in the State, the same Department was responsible for issuing 151 lakh ration cards although the actual number of families in the State stands at 123lakhs. It is also worth mentioning here that all of the 123 lakh families are not entitled to such ration cards and have not, in fact, received them. Moreover, most of the poor families who are the intended beneficiaries, still lack ration cards. Against this background, it was felt that it wasnecessary to understand what went wrong and how to streamline the TPDS.6The major findings in this dissertation are as given below:1. Exclusion and Inclusion Errors: Based on the comparative study of the TPDS database with the Agriculture database in the state of Karnataka, it is observed that approximately15.25%% of rural families (a population of 52 lakh) are definitely excluded from BPL benefits. Approximately 9.25% of BPL rural families (a population of 32 lakh) are erroneously included and identified as BPL families and are enjoying benefits that are not due to them at the cost of excluded BPL families.2. Savings in the subsidies: If the State of Karnataka is able to streamline its database onits own or by partnering with AADHAAR, the savings to the Government of Karnataka s exchequer could be in the range of Rs. 370 crores to Rs. 993 crores per year (based on the acceptability of % of BPL population in the State). The substantial amount of savings from the TPDS can be diverted to other social welfare sectors such as Education and Primary Health.3. Assessment of TPDS Partnership with AADHAAR: Finally, an attempt was made to assess how AADHAAR can streamline the TPDS through a partnership. This analysis is based on the working document prepared by UIDAI which envisions an AADHAAR TPDS partnership. This partnership has not yet been established as the AADHAAR project is still in the initial stages of implementation. Based on the provision of the working document on the TPDS and the recent GoK initiative of setting up the Karnataka Resident Data Hub (KRDH), it is concluded that AADHAAR or a new database such as the Karnataka Resident Data Hub (KRDH), can be enabler databases for the TPDS database in the State. However, in order to utilise the benefits of enabler databases, it is necessary to first cleanse the TPDS database through the de-duplication of demographics and biometrics data and then link the database with other stakeholders databases in the TPDS Ecosystem. As envisaged by UIDAI, FPSs will be able to connect easily to the Central Information Data Repository (CIDR) to get authentication information regarding a beneficiary. This solution, however, does not seem feasible as the CIDR will not identify a person as a TPDS beneficiary. This authentication process requires FPSs to have terminal devices, applications and considerable Internet bandwidth (which may not be available at most far flung, rural FPSs) for the authentication of one record; de-duplication checks would be on millions of records. AADHAAR will authenticate the uniqueness of a person by using a biometrics and demographic database and link the AADHAAR number with the ration card number. The rest of the provisions, as envisaged by UIDAI in their working paper, such as ensuring entitlements, linking future FPS allocations with authenticated off take by beneficiaries, collection of entitlements from any FPS within the State, tracking food grain movement, MIS and Electronic Benefit transfer will be dealt with by the Department of Food, GoK by automating their supply chain. It is not clear how AADHAAR alone can take care of all the challenges faced by TPDS in the country. AADHAAR can be an enabler but not the implementer. Therefore, it would be cost effective and logical to streamline the Department of Food, GoK database with the help of AADHAAR and make it central to the TPDS in the State of Karnataka. 4. Strategy and roadmap to streamline TPDS database : A three step strategy and roadmap has been suggested to streamline TPDS in the Goka. Ist step- Cleansing of TPDS database and mapping with AADHAAR b. 2nd step Detection of duplicate and other inconsistencies in TPDS database c. 3rd step On-going identification of beneficiaries with AADHAAR5. Recommendations: In order to have a fool proof identification system of beneficiaries in the TPDS in the Department of Food, GoK with the help of AADHAAR, it is important to develop inter-linkages with all the related stakeholders databases in the ecosystem. This is required so that whenever there is a need to validate the candidature of BPL,AAY or APL beneficiaries from other stakeholders databases, a synchronous relationship should help to cross verify and check the authenticity of the beneficiary. This will definitely help in taking care of Exclusion and Inclusion errors. For streamlining the identification of beneficiaries in the TPDS, it is recommended that instead of making the AADHAAR database (CIDR) or KRDH database central to all databases , it would be better to make them enabler databases and rely more on the database created by the Department of Food, GoK by cleansing the same. It is also important to note that developing such a huge database of beneficiaries with demographic and biometric details of approximately 4.5 crore individuals is not an easy task and would take 3-4 years to stabilise.