On Tuesday, the Supreme Court ruled that  it was not mandatory for citizens accessing public services to be enrolled in the Aadhar programme. But it made an exception for the public distribution system for food, kerosene and liquefied petroleum gas.

This is the first time that the court has specifically allowed the use of the 12-digit unique identity number in public schemes. In doing so, it has accepted the government's contention that by verifying beneficiaries, the biometrics-based identity database helps in the effective implementation of social welfare schemes and saves several thousand crore rupees of public funds.

To persuade the court to allow Aadhaar verification in the public distribution system, the government claimed the limited use of Aadhaar had already resulted in massive savings.

Eliminating 'ghosts, fakes, duplicates'

In affidavits submitted to the court on July 22,  the government said various ministries and state departments find Aadhaar to be the most reliable way of tracking “conflicting/similar benefits going to the same citizen and preventing unscrupulous elements from diverting the public resources for illegal purposes".

At the time of Aadhaar enrolment, an individual's biometrics and demographics are matched against every other person who has previously enrolled. This process is called de-duplication.

The government said it spent over Rs 4 lakh crore on various welfare programmes in 2014-'15. It claimed that linking the Aadhaar number to the bank accounts of beneficiaries in direct benefit transfer schemes had “considerably reduced the subsidy burden”.

In direct benefit transfer schemes, the government deposits cash into the bank accounts of people instead of giving them material subsidies like food rations or gas cylinders. In its affidavit, the government told the Supreme Court that the consumption of liquefied petroleum gas cylinders had fallen in 20 districts where direct benefits transfers had been implemented since August 2013, even as consumption had gone up in the rest of the country.

According to data submitted by the Ministry of Finance, between September 2012 to January 2013 and September 2013 to January 2014, the sales of LPG by oil marketing companies went up by 11% in India. But in the 20 districts where the Aadhaar-based direct benefits transfer scheme was being implemented, it fell by 10%. “Given that the subsidy burden of LPG is Rs 46,458 crore, even a 10% saving would mean saving a subsidy of Rs 4,600 crore,” the affidavit said.

It stated that in the process of de-duplication carried out by Indian Oil corporation Limited on basis of 8.08 crore Aadhaar, where the IOCL checked whether the same Aadhaar was found against two or more LPG connections, it found 8 lakh such instances, or 1%.

Aadhaar and MNREGA

Further, the government claimed studies in various states showed that Aadhaar was useful in eliminating “bogus and ghost workers” from the database of the Mahatma Gandhi Rural Employment Guarantee programme. The studies were neither named nor included in the petition. Nevertheless, the government said that after it linked MNREGA payments with Aadhaar, it found that in a sample of 1,573 MNREGA workers in Burdwan district of West Bengal, 13%  were bogus job-cards. In the 24 North Paragana district, the bogus job-cards constituted 18% in a sample of 1,530 workers.

Citing data from other states for various schemes, it said that if the court did not modify its previous orders that prohibited the use of Aadhaar in public schemes, “irreparable loss will be caused to the intended beneficiaries and the public exchequer”.

It said that it intended to make Aadhaar enrolment a mandatory requirement only under particular schemes, appending a list of four subsidy schemes (LPG, kerosene, food, fertilisers) and 35 welfare schemes (MNREGA, Janani Suraksha Yojana, Indira Awas Yojana, National Social Security Fund for Unorganised Sector Workers, and various health and crop insurance schemes). At the same time, it asked to be allowed to seek further modifications of the court's orders as and when direct benefits transfers are extended to other schemes.

It included passports, PAN cards, railway bookings, telecommunications (mobile, internet, data), and prison management systems among the services that it proposed to link with Aadhaar.

Discrepancies in data

On closer scrutiny, however, the data used by the government to buttress its case for the use of Aadhaar in subsidy schemes reveals a mixed picture on the removal of fake claimants.

To take one instance, the government has claimed that the elimination of “bogus” workers in the MNREGA database in Andhra Pradesh and Telangana led to savings of Rs 127 crore. Of 3.5 crore workers, 12.78 lakh workers were found to be bogus, it stated. But a closer look reveals that over 2.7 lakhs were dead, and 8 lakh, or three-fourth of the workers, had migrated to other places. Essentially, this means that the government included inactive workers as bogus workers. 'Inactive workers' are defined by the Ministry of Rural Development as those who have not worked in the scheme in the last financial year. Of the 3.5 crore workers cited, only one lakh were found to have two job cards.

Curiously, the figure of 12.78 lakh crore as bogus workers in MNREGA in Andhra Pradesh and Telangana alone is nearly 20 times the figure cited for all of India by the Minister of State for Rural Development Sudarshan Bhagat in response to a question asked in Parliament. The response filed on March 5 said that after using Aadhaar, 63,943 duplicate job cards had been found and eliminated in 300 districts all over India.

This points to the need for a closer scrutiny of the government's claims before it can be said whether Aadhaar has led to better targeting of public schemes or simply eliminated those who failed to enrol in its database.