Aadhaar benefits unclear

The benefits of Aadhaar, India’s biometrics-based unique national identity system, are unclear and the impact of direct benefit transfers it will be used to deliver to the poor is not studied enough, as per a new study paper published by Institute for Development and Research in Banking Technology (IDRBT), an autonomous institute established by the RBI. 

• In the seven years following its introduction, 1.12 billion Indians or 88.2% of the population have enrolled for Aadhaar.
• Established by UIDAI under Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, Aadhaar is now used for direct benefit transfers as well as distribution of food grains and essential commodities under the PDS by the state. It includes various payments linked through Aadhaar enabled payment system.
• There are issues related to Aadhaar such as last mile access problems, quality of authentication, unclear financial benefits and security concerns and said there needs to be caution in the manner in which the government is linking more economic activities with Aadhaar.
• Aadhaar has been caught in the issue of the citizen’s right to privacy and threat of information leak. The story reported in The Tribune on January 3, 2018 alleged that unrestricted access to details of over one billion Aadhaar numbers can be purchased at as little as Rs 500.
•  “It is a major security breach,” the deputy director of UIDAI, Chandigarh was quoted to have said.
• The protection of the data is a major concern for the UIDAI. For the first time in the history of India, there is now a readily available single target for cyber criminals as well as India’s external enemies. Any attack on UIDAI data can cripple Indian businesses and administration and would result in a huge loss to the country’s economy and the privacy of its citizens.
• Aadhaar is available in the database of a large number of service providers and any breach can compromise the information contained in it. This allows private players to build an ecosystem, i.e. services and applications around Aadhaar raises questions about the security of the database.
• In Dec 2017, it was found that Airtel used the Aadhaar based verification to open payment bank accounts of their customers without their consent and linked to receive LPG subsidy. No action was taken by the UIDAI for the violation of the Aadhaar Bill except barring Bharti Airtel and Airtel Payment Bank from opening new accounts. 
• More robust and comprehensive law is necessary on the use and misuse of the massive amount of data being generated and collected.
• Financial inclusion was one of the goals Aadhaar since inception, but a biometric solution tends to be long on promise and short on delivery.
• The growing emphasis on the use of Aadhaar as a compulsory ‘know your customer’ (KYC) norm is emerging as an obstacle in banking access for those who had registered with the earlier systems. Banks have blocked access to those who have not submitted their Aadhaar numbers. In the case of accounts closed by banks due to non-linking with Aadhaar, money has returned to government agencies. The customer then has to open a new bank account in another bank and then run to various government offices to change their bank account number registered under the scheme.
• Problems with withdrawal of money at a time when it is needed the most either due to non-working channels or problems with KYC compliance has convinced people that the best place for their money is their pocket or at home under the mattress.
• Customers of zero balance accounts opened for individuals are not allowed access to their accounts from non-home branches, but regular accounts are.
• Government claims that it has saved about Rs 14,672 crore using Aadhaar through DBT schemes for 2015-16. But a Canadian non-profit, International Institute of Sustainable Development, has claimed that the saved amount was Rs.120 crores only. 
• Does the change in the system of subsidy delivery from providing commodities and services to cash transfers actually benefit the poor? There are no clear answers. 
• It may inconvenience public distribution system beneficiaries and “the long-term benefits of DBT on the poor are as yet largely unstudied and most of the expectations are based on theoretical assumptions”.
• The Aadhaar Act allows the government to establish the citizen’s identity as a condition for the delivery of subsidies, benefits or services. Biometric authentication allows the government to reach genuine beneficiaries. But for this, the biometric authentication system has to be flawless which is not the case in India currently. Failures in biometric authentication is alarmingly high.
• Aadhaar allows a beneficiary to access benefits like PDS in any location irrespective of where he is registered. Authentications and failures were found to be the highest when a large number of people–migrants and non-migrants were present in the village. 
• These flaws in the biometric system raised the question if a government can provide benefits to citizens irrespective of where his/her Aadhaar was registered.
• There is no way of cross verifying the quality of biometrics stored, especially by the person who has enrolled. In a worst case scenario, a flawed biometric authentication system can lead to identity denials.
• Even assuming that only 5% of Indians are denied government benefits due to issues with Aadhaar, we are still looking at 50 million citizens. That is more than population of many European countries. 
• Does it mean this exclusion of a small minority is condonable in a democratic society?

Read the source article

It is clear that no studies were conducted about the feasibility, benefits and procedure to be followed for linking Aadhaar with all public economic activities. What ever came into the stupid minds of rulers and their assistants is being implemented subjecting crores of people to hardships and exposing them to unknown risks. Who wants all his transactions to be trackable either for tax payment purpose or as a matter of individual privacy? In any case Govt publicizing lies as a justification for its hare brained activities is unacceptable nonsense.

Telcos in India deep trouble

• Until a year ago, all Telcos in India were fairly well off making impressive profits with stock prices attracting investors.
• With Reliance Jio launching its operations, a year ago, with its inaugural FREE offers compelled the existing Telcos to spend massive amounts in advertising and customer retention activities that resulted in erosion of their handsome profits and landing them with huge losses.
• The data with us suggests that the total EBITDA (earnings before interest, taxes, depreciation and amortization) of the sector on an annualized basis is Rs 65,000 crore, which is clearly unsustainable for debt of more than Rs 4 lakh crore," the SBI chairperson said.
• Now Indian banking sector already reeling under insurmountable NPAs of over Rs.7 lakh crores stands exposed to another huge risk of over Rs.4 lakh crores.
• While Mukesh Ambani's borrowings from Banks is over Rs.1,80,000 crores and his investment in Reliance Jio is estimated at Rs.1,50,000 crores against its original estimate of Rs.85,000 crores. His strategy was to destroy competitors and monopolize Telco business with its advanced VOLTE technology is dealing deadly blow to existing Telcos namely Airtel, Vodafone, Idea, Reliance Communications, BSNL etc.
• The ongoing consolidation in Telco sector in India will result in job losses to the extent of 40,000 this year.
• Mukesh Ambani used Bank's money to push Banks to the brink of collapse. It is a matter of time Telcos loans of Rs. 4 lakh crores will become NPAs. How Reliance Jio will pay back its Rs.1.5 laks crores is  a million dollar question.
• The loans to Mukesh Ambani were granted by Banks during Modi's tenure i.e. during past three years as quid pro quo for funding his 2014 election campaign expenditure.
• Whether Mukesh Ambani will be able to make profits for Reliance Jio amidst chaos in Telco sector and repay banks is another million dollar question. How many more years he will hang on, we will have to wait and see.
• In all Indian Banks stands exposed to monumental risk of Rs. 5.50 lakh crores in Telco segment, in addition to existing NPAs of over Rs.7 lakh crores.
• Since three years Banks were unable to invest in infrastructure segment and other high value projects due to paucity of funds. This has resulted in GDP growth looking southward in addition to the deadly blow dealt by mindless demonetization 2016.
• Meager budget support for inducing additional capital, public sector banks are simply biting time and recent ordinance with code for NPAs recovery being worthless and with discouraging global parameters, Indian economy today is spiraling down at breakneck speed with all economic indices looking southward there is no magic wand to halt this except looking towards sky for 'ache din'. But 'ache din' will come only when decisions are sound and implementation is faultless but not for rhetoric and high decibel shouting.

My View:

A decade ago while launching Reliance Infocom services Mukesh Ambani's statement is paraphrased as "I wouldn't be interested in a bigger piece of smaller pie but would rather aim at smaller piece of larger pie". But today he stands exposed to bulldozing competitors with his money power and establish monopoly in Telco market and eventually loot the consumers. All this facilitated by none other than Modi. While bank NPAs are result of reckless activities by UPA regime, destruction of Telco sector and monopolizing by Reliance Jio and further burdening of Banks and job losses is the creation by Modi himself.