A recent study conducted by National Institute of Public Fiance and Policy(NIPFP) presented a innovative cost benefit analysis of Unique Identification or Aadhaar Project. The study cover the potential use of Aadhaar in seven major welfare scheme and subsidies. These are PDS, MGNREGA, School Education (including teachers salaries, mid-day meals, textbook and uniform), fertilizer subsidy, LPG subsidy, and payment in other social service scheme like pension, ICDS services etc. It estimated that likaging these program leads to 'a saving' of Rs 1 Lakh crore over 10 years and that after accounting for the cost of project the internal rate of return of the project will be over 50 percentage.
The NIPFE recognises that only some leakages in these program can be fixed by UID project like bogus beneficiaries and duplicates.
For PDF the report of Planning commission estimated that 57% of PDS grain diverted , of which 17% was attributed to ghost cards. So implementation of UID will be help us to reduse the leakage of these bogus beneficiaries. For MGNREGA the report assume that UID integration will leasd to saving of 12% of total expenditure . The same way liking bank account with UID will help to reduce the corruption.
Other cheaper technology such as computerization also help weep out bogus card and help plug other leakage. In case of Tamil Nadu has a fully computerised PDS system and there the overall PDS leakage are very small (4%)as compared to other state. In anther case Chattisgrah, overall leakge have fall 50% to 10% without linkage of UID, but through mealry fully computerization of the system.
So the question of Cost- benefit analysis should really address is whether Aadhaar is cost effective than other alternative such as effective utilization of ICT. This question is rising but not answered yet.
The NIPFE recognises that only some leakages in these program can be fixed by UID project like bogus beneficiaries and duplicates.
For PDF the report of Planning commission estimated that 57% of PDS grain diverted , of which 17% was attributed to ghost cards. So implementation of UID will be help us to reduse the leakage of these bogus beneficiaries. For MGNREGA the report assume that UID integration will leasd to saving of 12% of total expenditure . The same way liking bank account with UID will help to reduce the corruption.
Other cheaper technology such as computerization also help weep out bogus card and help plug other leakage. In case of Tamil Nadu has a fully computerised PDS system and there the overall PDS leakage are very small (4%)as compared to other state. In anther case Chattisgrah, overall leakge have fall 50% to 10% without linkage of UID, but through mealry fully computerization of the system.
So the question of Cost- benefit analysis should really address is whether Aadhaar is cost effective than other alternative such as effective utilization of ICT. This question is rising but not answered yet.
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