UID: Thoughts from an Erstwhile Skeptic

Avani Kapur

Last month I attended a Consultation Workshop on the Unique Identification Authority of India (UIDAI), now called AADHAR. With the first UID numbers being issued between August 2010 and February 2011, this was a part of UIDAI’s campaign to hold a wide range of consultations with Civil Society Organizations in various parts of the country.

For those of us, who are curious about the UID, and recognize the potential benefits it can have (can being the operative word here) but yet have our reservations, the workshop was definitely enlightening. One of the main things that came out from the consultation was the amount of confusion that still exists about what exactly the UID can and cannot do and how much of an invasion of privacy it actually is.

I thought it would thus be useful to lay out some facts regarding the UID.

Fact 1: The UID itself will collect only standard attributes such as name, date of birth, gender, father/mother/spouse/guardians name, address and a photograph. The only unique information is the biometrics (10 fingerprints and both iris scans).

Fact 2 : The UID will be given to all residents who are in India and avail services and not just citizens.

Fact 3: The information in the database will be used only for authentication purposes and will not be shared or transmitted. Anyone seeking to authenticate the identity of another person using the UID database – will only get a response in YES or NO.

Fact 4: The UIDAI is working on a partnership model with a variety of agencies and service providers ( both government and private sector) to enroll residents for UID Numbers and verify their identity. For e.g. Insurance companies, LPG marketing companies, RSBY, MG-NREGA etc. The UIDAI will also engage with Outreach Groups (essentially CSOs) to target, the homeless, urban poor, tribals, differently-abled population of the country etc.

Fact 5: The UID database will be guarded both physically and electronically by a few select individuals with high clearance. It will not be available even for many members of the UID staff and will be secured through encryption, and in a highly secure data vault.

Sounds good so far? The obvious question then is that if these ideas are indeed so good then why are people so skeptical and in some cases even taking an extreme position of completely rejecting the UIDAI. I think the answer is nuanced and symptomatic to deeper issues.

Broadly there are 4 main concerns regarding the UID, namely, concerns over exclusion, individual privacy, and misuse of data and finally whether the benefits outweigh the costs. Let’s deal with them one by one.

Exclusion
While the UID team keeps stressing that the UID is voluntary but the fact of the matter is, for all practical purposes, in time, it will become mandatory as service providers may require a person to have a UID to access services. The concern then is, what will happen to those who are unable or purposely unallowed to get the UID.

The case of exclusion is definitely a concern – but not limited to the UID alone. Instead, the UID for its part has tried to mitigate against this by having an introducer system and getting ngos to assist in the enrolment process. Now it is the job of all the enrolling agencies to make sure that everyone has access to it and for us, civil society to assist in the process.

Individual Privacy and Misuse of Data
The UID itself only collects standard attributes, but since the enrolling system is through partnership with existing agencies such as LIC, banks, PDS shops, nrega job cards etc - the full board of the UIDAI may have additional data fields related to identity. The fear being , this kind of information could compromise privacy of the people, and leave it open for misuse—racial profiling being an obvious threat.

This is a legitimate fear, but blaming the UID itself for this, is not.

On the one hand, the question of privacy in itself is a very “urban” concept. No one really talks about the fact that for NREGA, muster rolls, job cards and daily wages are a matter of public knowledge and are instead considered important components for accountability and transparency. Moreover, anyone not privileged enough to have a permanent address or identity proof will ascertain to the fact that finally having some sort of “identity” would alleviate the challenges of something as basic as getting children into school, getting a telephone connection or even a death certificate.

Second, a host of our personal information is already publically available and there are no guarantees that they are not prone to misuse. The Election Commission and Census already collect a lot of our personal information; the railways make the names and ages of passengers public each time we travel , not to mention online social interaction sites such as Facebook , Orkut and Twitter, which are often prone to hacking.



So even without the UID, what is urgently needed is a law protecting our privacy. Last week, the UPA government appointed a panel to create a blueprint for a new law guaranteeing a citizen’s right to privacy. Once in place, the law is meant to recognize the right to privacy of an individual as a fundamental right and have in place provisions against wrongful collection of and misuse of data. While it remains to be seen what shape the law will take, it has to be said, in a way the UID has finally made us think about this important issue.

Lastly, Expenditure
With crores of rupees being put into the operationalisation of UID – is it really worth it?

Lets be clear, the UID itself will not solve all of the world’s problems. However, what it does have the potential to do is to centralize and clean up the government databases – a huge step in itself. Anyone who has gone through government databases knows that often, it can be like looking for a needle in a haystack (for more details please see here)

And having authentic, clean, reliable data can be an important step in better delivering our services. Take for example the PDS. While the UID may not be able to solve the problem of people not being included in the BPL list and hence being excluded from the PDS system, it should be able to solve problems related to leakages (see post below) and the presence of a large number of fake ration cards – all of which are literally money down the drain.

Finally, let’s remember, like with most things, the UID model is only as good as its application!

Avani Kapur is Researcher and Coordinator, PAISA Project at the Accountability Initiative

CWG 2010 here we come...but at what cost?

Mandakini Devasher Surie

Delhi is a city under siege! Over the last year, a silent army of civil engineers, urban planners, construction workers and contractorss have brought this to a standstill. Signs of the siege are everywhere – on uneven sidewalks and pavements which threaten to send pedestrians sprawling, on roads and flyovers where monstrous potholes threaten to swallow unsuspecting motorists and bring the city to a grinding halt. The mission? Make Delhi ready and able to host the Commonwealth Games (CWG) in October this year.

The games have been heavily criticised and not only because preparations for them have thrown everyday life in the city completely off kilter. Concerns have been raised about the ‘game worthiness’ of several venues, the hurried efforts to ‘beautify’ certain sections of the city, the efforts to ‘clear’ the city of slum dwellers, beggars and hawkers which in practice has meant the demolition slums across the city leaving thousands homeless. A recent report by the Housing and Land Rights Network (HLRN) titled “The 2010 Commonwealth Games: Whose Wealth? Whose Commons?” puts a spotlight on some of these issues. Using the Right to Information Act 2005, HLRN accessed a copy of India’s Bid Document for the CWG games as well as information from different departments on the monies spent so far on the games. Their findings are staggering:

CWG Factoids

• The bidding process from start to finish cost India Rs 137 crore. The Bid Document included an unprecedented offer by India to provide free luxury accommodation, travel and trips to participants, delegates, officials.
• India made a last minute offer of $7.2 million or Rs 32.4 crore to train all Commonwealth Games athletes’ which apparently ensured India’s bid for the games.
• The proposed expenditure on sports infrastructure for the games was pegged at Rs 150 crore in the Bid Document but a whopping sum of Rs 3390 crore has already been spent on building stadiums. That’s a shocking 2160% increase on the initial budget!
• Official and unofficial estimates of the total cost of the games range from Rs 10,000 crore to Rs 30,000 crore;
  

The sheer volume of money being pumped into the CWG is unprecedented. To put things in perspective in this year’s Union Budget allocations for the CWG increased by a jaw dropping 6235% (from Rs 45.5 crore in 2005-06 to Rs 2,883 crore in 2009-10) (HLRN figures). Is this a case of misplaced priorities or are there really substantial gains to be had from hosting the games? In theory, the CWG games are supposed to put Delhi on the world map, bring in foreign investment, tourism and generate jobs, but international experience suggests that this is not always the case.

Several studies have shown that the economic benefits of mega-sporting events such as the Olympic Games or World Cup are hugely over-estimated. In a post-games scenario, many countries have struggled to earn back in revenues the huge amounts invested. For instance, American cities hosting the 1994 FIFA World Cup earned $ 4 billion in revenues from hosting the games but they collectively lost between $ 5.5 billion and $ 9.3 billion. Many countries are overwhelmed by debt – after barely pulling off the Olympic Games in 2004, Greece struggled to keep public debt down, the effects of which are being felt now. The costs continue to escalate for years after with countries having to find resources to manage and maintain games venues.

There are also questions about who really benefits from such events? South Africa has spent 3.5 billion pounds on preparations (1.72% of its GDP) to host the 2010 FIFA World Cup, but there are concerns that most of the facilities will really benefit tourists and the middle class rather than South Africa’s urban poor. Over and above the, investments in infrastructure mean budget cuts for other sectors. The Delhi Government has already announced that it will not have funds to undertake new projects in the forthcoming fiscal year. Moreover, according to the HLRN report funds marked for social sector expenditure have already been reallocated by the Delhi Government for the CWG. Couple this with the city wide drive against hawkers and beggars and it’s no wonder many have termed the CWG ‘anti-poor’ in its approach.

It is perhaps keeping of all of these factors in mind, that the Government of New Zealand recently refused to support the country’s bid to host the 2018 Commonwealth Games because at $600 million it was too expensive. If only, such prudence had prevailed in Delhi. Come October, Delhi will play host to athletes’ and tourists from countries across the Commonwealth. In true sarkari style, things will be completed in breakneck speed, we’ll put on a grand old show and maybe we’ll even win a medal or two. But let’s not kid ourselves; we’re in for some tough times ahead – fiscal and otherwise.

Mandakini D Surie is a Research Associate with the Accountability Initiative.

The Curious Case of Unspent Funds

Avani Kapur

Every year the week before and after the budget, debates across all media channels and civil society tend to focus on “allocations” – how much money has been allocated for Sarva Shiksha Abhiyan? What is the jump in allocations for rural development? How much is health getting? But amidst the outcry on allocations, the most important question that seems to get lost is, how was last year’s money actually spent?

A week before the budget was announced, newspapers carried a startling finding by the Comptroller and Auditor General - that “Rs. 1 lakh crore budget funds go unspent every year”. But in the midst of the attention given to allocations, the story and along with it the attention towards unspent funds, somehow disappeared.

According to the CAG report, in 2007-08, under 97 grants of civil ministries, there was an unspent provision of Rs. 1,08,000 crore. The report was based on the findings by the Comptroller and Auditor General (CAG) based on the accounts of 2005-2007. The following table from the Times of India (TOI) summarizes some of the CAG findings. For those interested in going deeper into the report, click here

Unspent funds are indeed a curious thing and broadly there are a few things that continue to perplex me and may be some of the keys to this mystery.

First, The Flow of Funds:
In recent years, there has been a paradigm shift in the Union Government’s strategy for implementation of flagship programmes and other centrally sponsored schemes (CSS) for poverty alleviation, health care, education, employment, sanitation etc. Most of these schemes were initially implemented on a cost sharing basis with transfer of central share to state government. Now, the Union Government has started transferring their share directly to state/district level autonomous bodies, societies and ngos for implementation of CSS without devolving funds through the state government accounts.

As the CAG report states, “For the year 2007-08, Union Government made a provision for transfer of central plan assistance of Rs. 51259.85 crore (as per revised estimates) directly to these state/district level societies…. Expenditure in the accounts of these implementing agencies is kept outside Government accounts not readily ascertainable.” So basically, we have no real idea about the amount of actual expenditures being undertaken and even the expenditure reflected in the accounts is to that extent, overstated. How will we develop proper mechanisms to monitor these flows of funds? If “society” funds are outside the ambit of the government accounts – where is the transparency?

Second, Timings of disbursements:
Why is it that funds continue to be released in the last few quarters of the financial years? In education, 63% of SSA funds were spent in the second half of FY 2008-09. Even the CAG report noted delays in funds in FY 2007-08. The table below summarizes some of their findings:

What is worse is that we don’t seem to have learnt from past mistakes. According to the TOI report, even the Union Government’s monthly accounts for the current year, reveal that some of the ministries’ expenditure till December 2009 was not more than 50% of the annual budget, though only 3 months remained for the end of the financial year. All this is despite the fact that on the Public Accounts Committee’s recommendations, the Ministry of Finance issued instructions to all Ministries/Departments to restrict their expenditure during the last quarter of the financial year to 33% of the budget amount.

Finally, Trends:
Why is it that some states spend more than others? For example in FY 2007-08, while Rajasthan and Chhattisgarh spent over 90% of the allocated funds for SSA, Madhya Pradesh and Bihar spent 57% and 42% respectively. Similarly in health, in FY 2008-09, Madhya Pradesh and Uttar Pradesh spent more than 90% in FY 2008-09, while Bihar spent 66% and Orissa spent 75% of total funds available.

And finally, is it easier to incur expenditure on some items more than others? or why do some expenditure items get spent more than others? Why do untied grants in National Rural Health Mission hardly get spent (Bihar spent 11% and Himachal Pradesh spent 37% of untied funds available). In education, why is it that items like infrastructure and teacher salaries get spent more than teacher trainings or innovation grants?

I don’t have the answers, but it’s time we at least start asking the questions!

Avani Kapur is Researcher and Coordinator, PAISA Project at Accountability Initiative

AI Budget Series: Rural Sanitation and Drinking Water

In the last of a 4 - part series on social sector spending in India, the Accountability Initiative in collaboration with Live Mint, looks at expenditure on rural drinking water and sanitation . For a ready reckoner (image) click here. For a detailed analysis see the article -Rural Sanitation and Drinking Water:Mere Infrastructure Won't Solve Problems

AI Budget Series: Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS)

In the first of a 4 - part series on social sector spending in India, the Accountability Initiative in collaboration with Live Mint, looks at expenditure under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS). For a ready reckoner (image) click here. For a detailed analysis see the article - Rural Economics: How taxpayers' money is (or isn't) being spent.

Budget 2010 - Great Expectations

Anit Mukherjee

It is the Budget season again. Every year, the nation looks forward to the two-hour speech of the Finance Minister where he lays out the government’s housekeeping statement – revenues collected, expenditures incurred and the plan for the next year. The budget means different things to different people. Some focus on the tax rates on income, goods and services, while others look at how much the government is spending and on what. But the bigger question is: what does the budget signify for the nation?

Every budget has a context and a theme. Budget 2009 was in the backdrop of the financial crisis, the general elections and the post-election policy direction. The theme was crisis-management - how to pull the economy out of the downturn trumped the concerns over the fiscal deficit which was pegged at 6.8 percent of GDP, the highest since 2003-04. The bold decisions were put off until later.

It is in this backdrop that Budget 2010 will be presented. The economy has come out of the downturn pretty much unscathed compared to other countries in the developed world. So the theme this year would be about reigning in the deficit, rationalizing expenditure and focusing on priority sectors. This is exactly what any family would do after a year of profligacy to get its finances in order.

So what can we expect from the Finance Minister this year? First of all, it would be a difficult balancing act – the need to raise more resources through higher taxes vis-à-vis derailing the growth rebound. The second is to ensure sustained and increased financing for core sectors – education, health, rural and urban infrastructure. Third, the budget needs to take into account the recommendations of the Thirteenth Finance Commission which will be tabled in this session of the Parliament.

The most significant talking point may be the allocation for education. The operationalization of the Right to Education (RTE) means that substantially more allocation would be needed in the Centre’s budget. At the same time, the Rashtriya Madhyamik Shiksha Abhiyan (RMSA) would pick up steam, and allocation for higher education will continue to increase. On the other hand, this budget is expected to maintain the status quo on NRHM, NREGS and Bharat Nirman.

There is one thing that certainly this budget would not do – talk about how to improve the efficiency and accountability of expenditure. Everyone in government loves to spend, nobody likes to be asked “What exactly did you do with the money”? The great expectations of transparency, accountability and independent monitoring outlined in the President’s address last year seems to have been conveniently forgotten, and the government seems to spend the people’s money as it likes. This needs to change – the sooner, the better.

Anit Mukherjee is with the National Institute of Public Finance Policy (NIPFP).

Show Me the Money – The trials and tribulations of finding budgetary data in India

Avani Kapur


Every year on budget day, millions across the country tune into their television or radio-sets to hear the verdict of the budget. We want to know how much money has been allocated for various schemes and how the government has been fairing on its promises during the previous years. Yet, apart from that one day where basic budgetary data is clearly spelt out for us in a language everyone can understand, for the most part, anyone who has tried getting budgetary data on the social sector knows the arduous task it entails. A quick look at the Ministry of Health Website gives a clear indication of this!

As part of my work at the Accountability Initiative, I have been involved in trying to collect and disseminate information on social sector expenditures (see here). The importance of understanding social sector budgetary data becomes relevant by the quantum of money that it involves. The fact that the Indian economy has been growing at an incredible rate is a well-known fact. And this has been accompanied with large increases in social sector spending. According to the Economic Survey of India, Rs. 2,39,340 crores was spent in 2006-07 (the latest year for which actual expenditure figures are available) on Social Services including health and education. But how much of this actually reaches the service provider?

For the most part, tracking expenditure through budget documents requires an understanding of the expenditure responsibilities within and across Central and State governments. Budgets usually involve codes and although since 1987 budget codes have been harmonized, the process and documentation of budget-making has not kept pace with the changes over the last two decades.

Broadly there are 4 places to look for budgetary data, but each comes with its own set of limitations. One of the first places to look for budget documents is the Central Government’s dedicated budget website- www.indiabudget.nic.in. However, while the detailed demand for grants provides the Revised Estimates (RE) and Budget Estimates (BE), the final accounted expenditure is not available. Second, there is the Reserve Bank of India (RBI), which gives information about the amount of money allocated under different sectors and states, but here too, there is no detailed information on how, and on what, the money is being spent.

In order to get details about expenditure one needs to go to a separate document called the ‘Finance Accounts’, which is not easily available online. Moreover, there is a 2 year lag in reporting, i.e. for 2008-09 financial year, actual expenditure is available only up to 2006-07.

Similarly, while budget documents of the State governments and relevant government ministries do provide actual expenditure, they are not always publically available online and even when they are, they are not easy to navigate as there is no standardization in the presentation of budget documents across states or departments along with the time-lag problem already mentioned.

Apart from the difficulty in finding information, even if the information is available, there are problems of different reporting styles, lack of reliable and up-to-date information.

To take the example of education, while the RBI reports it under the budget head of ‘’Education, Sports, Art and Culture’’, the Central Government budget website puts education under the head of General, Elementary, Secondary and Adult Education. This makes it difficult to know which is the right source and the data naturally doesn’t match, making cross-verification difficult.

Moreover, for social sectors such as education, there may be multiple departments delivering the service. For example, in Madhya Pradesh and Chattisgarh, schools in tribal-dominated blocks come under the domain of the Tribal Welfare Department. This means that the total expenditure for education is generally higher than the expenditure incurred by the Department of Education.

The problem is further intensified in cases where fiscal responsibility is devolved to the lower levels of government. Significant portion of grants coming from the Centre go directly to the panchayats through the State budget. While the State budget documents mention the quantum of block grants to panchayats made by various departments, they often do not mention the purpose of the grants. Moreover, the lack of documentation by the Panchayats along the lines of a national system of accounts makes reconciling the grants coming from the Centre and the State, with panchayat records, virtually impossible.

The lack of regular and reliable data is evident from the Sarva Shiksha Abhiyan Web Portal wherein, till date, expenditure under the various heads is only available up till January 2009. There is also no way of knowing when the website would be updated .

In the absence of a centralised information database tracking, the allocation and expenditure of funds (even for the government) becomes an extremely tedious exercise, having implications for planning as well as efficiency. The (often) big difference in revised estimates and budget estimates indicates that there are problems in the planning process, often caused by the inability to incorporate the spillovers of unspent funds. According to estimates, more than Rs.50,000 crores that were committed to flagship programs such as Sarva Shiksha Abhiyan, National Rural Health Mission etc, in previous years, are lying unutilized.

A centralised information system would assist in mitigating this problem by catching mistakes and inefficiencies and also ensuring transparency.

With the advent of the Right to Information Act (RTI), we now have a legal duty to provide information including budgetary information. Section 4(2) of the RTI, calls for the proactive disclosure of information of public authorities and mandates, “it shall be the constant endeavour of every public authority….. to provide as much information suo moto to the public at regular intervals through various means of communication including the internet, so that the public have minimum resort to the use of this act to obtain information”. Websites such as the Andhra Pradesh Rural Employment Guarantee Scheme (APREGS) website, with its well-organised and up-to-date information for various heads right up to the mandal level indicate that creating such a system is possible. Now it is time we step up to the challenge!

Avani Kapur is Researcher and Coordinator of PAISA project at Accountability Initiative