Did Aadhaar really save Rs. 57,000 crores? Simply put, no.

In an editorial, Dr. Ajay Bhushan Pandey said, “Aadhaar has saved the government more than Rs 56,000 crore during the last three years by removing fakes and duplicates.”[1]

There is, however, very little empirical evidence justifying this figure. When examining the breakdown of this figure, we find that in majority of cases, the government has not published how it calculated the savings numbers. The little data that is available has to be gleaned from responses to questions in Parliament or Right to Information (RTI) applications.

Furthermore, while the government attributes these savings to Aadhaar, DBTs, and other initiatives, the specific breakdown is not provided. This lack of granularity has been exploited to associate the savings figure to whichever initiative one is discussing. Often the entire estimate of Rs. 57,000 crores has been attributed to Aadhaar, like Dr. Pandey did in his editorial, despite the government’s own records showcasing other factors.

In the table below, we show a break-up of the figures by scheme and by year, and the current status of evidence. For half of the amount, there is no evidence provided on how the estimate was arrived at. For the other half, there is incomplete data. Neither is there any data on what is the specific contribution of Aadhaar. See box below for what we learn from the partial evidence that is available.


To try and correct for this, we apply very conservative assumptions to calculate the potential contribution of Aadhaar in the total saving estimate. We estimate that around Rs. 6,000 crores is likely to be the upper limit of the savings that is attributable to Aadhaar. Since our assumptions are conservative, the actual savings amount is likely to be significantly lower.

We had to resort to four assumptions to calculate our guesstimate of the upper limit of savings due to Aadhaar.

  1. Wherever information is provided, we learn that the government claims that the savings is based on the deletion of fake, duplicate, or ineligible beneficiaries, in addition to other reasons. We assume that similar reasoning applies to other schemes where such information is not provided.
  2. From two separate government sources (see box below), we glean what is the proportion of beneficiaries deleted that are fake or duplicate – the only two factors for which Aadhaar can be used. We use the higher of these proportions as a proxy for schemes where there is no data.
  3. Since we are calculating the upper limit, we also assume that all the fake and duplicate eliminations are due to Aadhaar. In reality, however, many of the fakes and duplicates are also deleted without the use of Aadhaar (as evidenced through government documents).
  4. Finally, we assume that all the fakes/duplicates deleted are genuine. There exists journalistic evidence that many of the names deleted from the system on account of being a fake or duplicate are in fact genuine beneficiaries. Naturally deletion of genuine beneficiaries cannot be counted as a “saving.”

It is of course unfortunate that we have to resort to guesstimates but this pertains to a larger issue that there isn’t enough data to correctly measure the impact of one of the most significant governance interventions of this decade. While our team and other researchers will strive to fill these gaps in data by filing RTIs, we also call upon the central and state governments to release more data that enables a clear, specific, and counterfactual-based measurement of the impact of Aadhaar, and other governance initiatives.

Box 1: Partial lessons from the partial data

 LPG-PAHAL

More than half of the Rs. 57,000 crore savings estimate is under the PAHAL scheme, which has initiated DBTs to provide the LPG subsidy. Details of the calculations are only available for 2014-15. The calculation uses an aggressive assumption that each of the deleted beneficiaries would have bought the maximum of 12 cylinders per year. This is an over-estimate. In fact, the Comptroller Auditor General (CAG) debunked this assumption when the Ministry of Petroleum used it for another savings estimate. The CAG preferred to use the national average of 6.27 cylinders (in 2014-15) instead. We also used this assumption for calculating the upper limit of Aadhaar’s contribution to the savings estimate.

Further, the CAG reported that the number of beneficiaries deleted included bogus and ineligible persons. While Aadhaar can potentially be used to weed out “bogus” persons, it cannot be used to determine eligibility (as it does not collect socioeconomic data). This clearly indicates that the specific contribution of Aadhaar is likely to be lower than the reported figure.

PDS

Under the Public Distribution System (PDS), the savings figure of Rs. 14,000 crores is attributed to the deletion of 2.33 crore ration cards and better targeting of beneficiaries. Other reasons include digitization and migration. Again, since Aadhaar cannot have a role in improving targeting or detecting migration, its specific contribution is lower than the total estimate. In the State of Aadhaar Report 2016-17, we write that “by 2014, the total number of duplicates eliminated in PDS was 12 million, of which about 2 million were removed using Aadhaar.” This points to Aadhaar’s contribution being around 16.7%. In our calculation, we use this proportion (highest of all estimates) to proxy for other schemes where such data is not available (except for MGNREGA, see below).

Also useful to note that the data available on ration cards deleted is inconsistent. In 2016, while answering separate questions in the Rajya Sabha and the Lok Sabha, the Minister in-charge of Public Distribution provided vastly different data on this metric.

MGNREGA

In the savings breakdown, there is no explanation in the public domain for the numbers under the Mahatma Gandhi National Rural Employment Guarantee Scheme. However, data from an RTI filed by Jean Drèze provides a break up of the various reasons for which job cards were deleted in 2016-17. Only about 12.6% of the deleted job cards were due to fakes or duplicates, the factors that Aadhaar can help weed out. Migration and other reasons explained the remaining 87.4% of deletions. These figures too reveal that the specific contribution of Aadhaar in the total savings figure for MGNREGS is far below the total savings estimate.

This is a quick assessment by IDinsight’s State of Aadhaar team. For questions or feedback, feel free to write to us at [email protected]

[1] Note the current official figure is more than Rs. 57,000 crores, not Rs. 56,000 crores as mentioned in Dr. Pandey’s article.