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Q. Aadhaar’s legal ecosystem needs big upgrade as it becomes a must for many services: Discuss the economic impact of bring out the Aadhaar card.
Jun 29, 2017 Related to : GS Paper-2

Ans :

Introduction-

Aadhaar’s reach has been extended once again with government making it mandatory for TB patients who wish to receive state aid for treatment. For sure, Aadhaar is an important tool to prevent misappropriation of resources in delivery of welfare schemes but the speed of its dissemination is worrisome. Not just welfare schemes, even in areas such as filing income tax returns it’s now mandatory. 

Economic Impact of Aadhaar Card: 

  • The much acclaimed JAM (Jan Dhan-Aadhaar-Mobile) Trinity through the usage of financial and digital inclusion is trying to change the socio-economic condition of society. It is largely helping the disadvantaged and distressed classes of people in availing the benefits of major Government schemes and subsidies. For instance, Schemes like MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) and PDS (Public Distribution System) have started using Aadhaar card for the purpose of Direct Benefits Transfer and supply of food grains to the BPL people, etc.
  • Even the education sector can be a great beneficiary of Aadhaar enabled payments, for instance in providing the scholarships for students. Aadhaar as a medium of citizen centric governance can prove to be an effective instrument when the schemes like Mid Day Meals and National Nutrient Mission will achieve higher success through this tool.
  • Moreover these days, financial services are being linked to Aadhaar at a rapid pace. The banks have been instructed to go for KYC (know your customer) for the functioning of bank accounts which will be also simultaneously linked with PAN Cards. Hence, a system of true checks can be installed upon the banking systems.
  • In addition to that, Aadhaar enabled payment system can benefit a large number of farmers who go to sell their produce at the agriculture markets. If payments are made directly to them (Direct Benefits Transfer), it will boost financial inclusion and credit worthiness. The banks can offer those loans and crop insurance which can revamp agriculture sector.
  • The Public Distribution System has always been known to be inefficient and mired in corruption. Now that loopholes have been identified — such as inadequacy of commodities, lack of supervision of PDS centres, paying bribes to obtain cards, etc — it must be restructured.

Conclusion:

Aadhaar as an idea provides a single view of beneficiary data and information, aiding in streamlining policy decisions for the state. It will create an enabling ecosystem for data-driven governance in India. To conclude, Aadhaar’s impact on our economy has just started to show results but the future is even brighter and we can expect Aadhaar to be a game-changer.


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