Why Budget 2012 makes that Aadhaar card important

If you haven’t applied for the Aadhaar card yet and were wondering about how serious the government is about the project, Finance Minister Pranab Mukherjee has laid all doubts to rest. Pranab Mukherjee has allocated Rs 14,000 crore for the scheme which aims to provide unique identification numbers to every citizen in the country. The sanctioned amount is expected to aid in the enrollments of around 40 crore Indians by June 2013. [caption id=“attachment_248049” align=“alignleft” width=“380” caption=“The Aadhar is scheme is already being used in pilot projects across the country to transfer subsidies directly for kerosene and LPG cylinders. AFP”]  [/caption] “The Aadhaar platform is now ready to support the payments of MG-NREGA; old age, widow and disability pensions; and scholarships directly to the beneficiary accounts in selected areas,” Mukherjee said while delivering his budget speech. An important feature the government is hoping to use the Aadhar numbers for is the transfer of subsidies directly to people who need it most and prevent wastage. The Finance Minister spoke of a pilot project on in Mysore under which LPG cylinders for cooking were being sold at market rates and the subsidy that buyers were eligible for was being directly transferred into their bank accounts based on their Aadhar numbers. This scheme allowed the government to allot subsidies to buyers depending on their economic status. There are similar projects for direct transfer of subsidy for kerosene in Alwar, Rajasthan and to validate ration cards in Jharkhand. Similar schemes will be rolled out in 50 districts across the country. The IT industry has come out in support of the government’s plan to support the UID scheme as they believe it could provide them with many opportunities to be involved given the number of devices and IT infrastructure needed to carry them out. “Scaling up of the Aadhaar project as well as enabling it to support PDS will greatly benefit the common man,” Naresh Wadhwa, President and Country Manager, Cisco (India and SAARC) was quoted as saying in the Business Line. The Finance Minister also accepted the recommendations of a task force headed by Nandan Nilekani on transferring direct subsidies related to fertilisers directly to farmers. Under the scheme a mobile- based Fertiliser Management System (mFMS) has been designed to provide information on the movement of fertilisers and subsidies, from the manufacturer to retailer level. To be rolled out nation-wide during 2012, the subsidy due will be initially be sent to the retailer and in a later stage of the project directly to the farmer. However, banks have expressed concerns over the transfer of funds directly to the customers saying they might need to scale up their IT capabilities. They had also expressed doubts over the the ‘Know Your Customer’ norms being followed by the smaller banks and if identities were being verified properly. Of course there are other opponents to the Finance Minister’s plans as well like this group of people in Mizoram who were opposed to the Aadhar unique identification card on the grounds that it was Satan’s plan to number them as part of his plan to  rule the world. See more Budget 2012 videos and expert views on Firstpost: Ajay Shah , Rupa Rege Nitsure , Indranil Pan , Ashima Goyal , Jim Walker , DK Joshi , Ajit Ranade , Art Woo . See more Budget 2012 issue based videos and firstpost’s analyses: Subsidies , Fiscal deficit , Inflation , Taxation , Dissecting the Budget , What Budget 2012 means for markets .