Aadhaar is claimed to provide identification to more than 1.2 billion Indian residents, or more than 90% of India’s population. However, a study report from three states, Andhra Pradesh, Rajasthan, and West Bengal, reveal that almost 20 lakh people were denied food distributed through public distribution system (PDS) or ration shop due to Aadhaar. In addition, it also raises question about the government claims on savings of Rs83,000 crore due to Aadhaar. The report also found that majority of the respondents care about their right to privacy and how their Aadhaar information is used by the government.
According to the “State of Aadhaar Report 2017-18” prepared by IDinsight, and sponsored by Omidyar Network, exclusion from food ration (PDS) due to Aadhaar-related factors is significant. “Exclusion from receiving benefits due to Aadhaar-related factors significant 0.8%, 2.2%, and 0.8% of PDS beneficiaries in rural Andhra Pradesh, Rajasthan, and West Bengal, respectively, are excluded from their entitlements due to Aadhaar-related factors. This extrapolates to 20 lakh individuals monthly. However, non-Aadhaar reasons, such as ration unavailability, contribute much more to exclusion from,” the report says.
While Aadhaar-related reasons include, Aadhaar seeding, Aadhaar authentication failures, non-availability of point of sales (PoS)-able member and e-PoS connectivity or electricity issues, non-Aadhaar related reasons include, non-availability of ration and other reasons such as dealer not being present.
According to the report, biometric authentication failures are often cited as a reason for exclusion. In Rajasthan, 1.2% of all PDS beneficiaries face exclusion due to Aadhaar authentication failures. Note that the incidence of biometric authentication failure is much higher as revealed by UIDAI‘s own data.
“Since fair price shop owners are supposed to use a manual override mechanism for genuine beneficiaries, exclusion due to authentication failures should technically be zero. However, our data reveals the intersection of biometric failure and the manual override (incorrectly) not being employed, leading to exclusion. Of those who are able to successfully authenticate themselves, 1.9% 3% of PDS beneficiaries in Andhra Pradesh and Rajasthan, respectively, required more than three attempts to do so,” the report says.
Unsubstantiated claims of saving due to Aadhaar
The Government of India claims that Rs83,000 crore ($12.5 billion) has been saved in four years from FY2014-15 to FY2017-18 because of Aadhaar, direct benefit transfer (DBT), digitisation, and other initiatives. The main source for savings is deletion of fake, duplicate, or ineligible accounts. For a breakdown of the savings figure, along with data on the corresponding number of non-genuine programme beneficiaries deleted.
“This estimate, however, suffers from three lacunae,” the report says, adding, “One, the government has not provided the underlying data backing the number of non-genuine beneficiaries claimed to be deleted. Two, there is no clarification provided on whether the number of deletions excludes genuine beneficiaries and how that figure was calculated. Finally, no evidence is provided regarding Aadhaar’s specific contribution to the deletion of non-genuine beneficiaries, which is valuable to ascertain the precise cost-benefit of Aadhaar’s use to plug leakages.
Privacy and usage concerns
Last year, a nine-Judge Bench of the Supreme Court passed a landmark judgementrecognisingRight to Privacy as fundamental right. The judgement came in light of a series of individual petitions linked to Aadhaar combined with the writ petition filed by retired High Court Justice KS Puttaswamy challenging various aspects of the Aadhaar project, especially its potential violations of individual privacy. Privacy was deemed an undeveloped and elitist concept in the proceedings of Justice KS Puttaswamy (Retd.) case.
“However,” the report says, “findings from our survey do not support this view. To a question asking respondents whether they consider it important (or not) to know how the government uses their information, more than 96% of respondents in the three surveyed states contended that it was indeed important, for all three types of information. These findings are in line with qualitative interviews conducted with low-income individuals in a collaborative effort between Dalberg, CGAP, and Dvara Research. One of their key insights was that respondents were ‘highly protective’ of their personal information, including their Aadhaar numbers (Privacy on the Line 2017).”
Data entry errors
The Report also highlights errors in data quality. At the peak of the enrolment process, the UIDAI was facilitating enrolment of nearly 10 lakh people a day, it says, adding, “This raises the question about whether the scale of the enrolment made the exercise vulnerable to data entry errors. When asked, 8.8% of people stated that their Aadhaar letter contained an error. The errors are self-reported and there is reason to believe these are a lower-bound estimate for errors Aadhaar data has more self-reported errors than the voter ID database.”
The most common source of error in Andhra Pradesh and West Bengal was the name of the respondent, while in Rajasthan date of birth contained the highest number of self-reported errors.
The report says, “The magnitude of error(s) also matters in terms of how the error affects people. Of those who reported an error in their name, about one-third claimed their full name was wrong while two-thirds noted an incorrect spelling.”
“We also asked respondents about the perceived source of the error. About 89% reported their error(s) was due to data entry mistakes while 10.3% stated a pre-existing error in a source document. The remaining errors were attributed to mistakes made by the respondents themselves,” it added.
96% paid more than the designated fee to fix errors
The UIDAI has established processes for the correction of errors in Aadhaar. Most who tried to get their error rectified claimed to be successful. However, only 53% of those with errors actually reported trying to get the error corrected. An important concern that emerges from the data on the enrolment process is that of the respondents who paid to get the error fixed (82.4%), 96% reported paying more than the designated fee of Rs25, the report revealed.
UIDAI regulations state that enrolment in Aadhaar is free and no entity can charge a fee for this service. “However, findings from our survey show that this regulation has not always borne out in practice. The highest incidence of deviation was found in Rajasthan, with 23.7% of people stating that they paid to enrol in Aadhaar. Those in Andhra Pradesh and West Bengal experienced this issue as well with 9% and 5.7% of people, respectively, paying to enrol. Those who enrolled in an Aadhaar camp were less likely to have paid for enrolment in all three states.”
In Andhra Pradesh and West Bengal, a relatively small number of people were wrongly charged an enrolment fee. However, in Rajasthan 24% paid a fee. People also encountered more challenges with the process of updating their Aadhaar, compared to the process of enrolling, such as paying higher-than-required fees.
“Of those who paid higher-than-required fees, majority were unaware of the actual cost. Conduct awareness campaign around fees and processes, especially for vulnerable groups. This highlights requirement of setting up of a strong grievance redress mechanism,” the report says.
Updating Aadhaar is lifelong process
According to IDinsight, people in the three states, where it conducted its survey, faced greater challenges when fixing mistakes or updating information. It says, “Updates will be required as long as the system is in place. As the administrator of the world’s largest biometric database, the UIDAI will face significant challenges ensuring Aadhaar data remains current and updated. A system containing errors is likely to cause problems, ranging from minor inconveniences to serious threats of exclusion.”
e-KYC not yet picked up
The Survey found that Aadhaar’s analog version (the letter) is much more widely used to open bank accounts than its digital version (e-KYC). It says, only 17% bank customers have used
Aadhaar e-KYC while 67% used Aadhaar letter while rest used other IDs to open bank account.
The report from IDinsight says, “As for the prevalence of e-KYC in the opening of bank accounts in rural settings, our data suggests uptake is fairly low. According to our survey results, for those who opened an account in the last three years, e-KYC usage was 12.8% and 11.5% in Andhra Pradesh and Rajasthan, respectively. Uptake was higher in West Bengal, with 26.7% of accounts opened within the last three years using e-KYC.”
“The gap between the proportion of people who used Aadhaar as a means of identification and those who used e-KYC may be explained in part by the lack of a differentiation factor of e-KYC in the opening of bank accounts. In our survey data, using Aadhaar e-KYC is not correlated with a higher likelihood of accessing one’s bank account within one day of opening. Thus, we have no evidence that e-KYC expedited the process of opening an account, which is contrary to the stated benefits. This held true for all three states,” it added.
Use of microATMs remains low
According to the report, only 17% of account-holders surveyed had recently used a microATM. In Andhra Pradesh, 33.4% of respondents who used their bank account in the last three months reported having used a microATM. In West Bengal and Rajasthan, it was 14.7% and 5.1%, respectively.
“Too few people currently have access to alternatives to brick-and-mortar banks. Ready access to microATMs could change this; however, the network supporting business correspondents (BCs) needs to be strengthened. A recent study by MicroSave highlighted issues that may be leading many to continue to transact at a bank. About 65% of BCs who carry a microATM experienced service downtimes in the previous month, which was higher than those who do not use a microATM at 50%. In addition, uncertainty of a successful transaction with a BC was higher. An overwhelming majority of BCs (94%) currently do not offer services to customers of other banks (i.e, those who do not have an account with the specific bank employing the BC); 76% reported having faced problems in maintaining liquidity. If the usage of BCs and microATMs is to be encouraged, reliability of the branchless network must improve,” the report says.

Related posts