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The Telegraph
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RETREAT AGAIN

The Aadhaar project, one of the few original and big schemes that the United Progressive Alliance conceived of in its second incarnation, has always been plagued by problems. First it was the victim of an unseemly turf war when the home ministry decided to back the National Population Register, a rival ID system, which had completely different aims. One result of this was the dilution of the original Aadhaar scheme that was marked by simplicity. Second were the legal objections to the scheme that were raised. And now comes what can be described, with only a hint of exaggeration, as the coup de grâce. This is the decision of the Union cabinet to shelve for the time being the idea of transferring subsidies to households using cooking gas by way of Aadhaar-linked bank accounts. One reason for this retreat is the lack of time. The government dawdled over this project for such a long time that it found itself hard-pressed to implement the roll out. It is a pity that the government was so myopic that it could not see the problems of implementation. The Aadhaar project is one more item in the UPA’s long list of failures.

The short-sightedness is only one aspect of the problem. The other factor to consider is the plight of the UPA, or, more specifically, the plight of the Congress. With the latter’s electoral prospects looking gloomier by the day, it does not want to take even the smallest risk. Yet, if the scheme were to be implemented properly, it would be beneficial. (For the sake of argument, The Telegraph is setting aside the intellectual and economic objections it has towards the granting of subsidies.) One prominent feature of the Indian subsidy system is leakage: the full subsidy hardly ever reaches those for whom it is intended. Direct transfers, envisaged by the Aadhaar project, would stop leakages. It would also enable people to come into the formal financial process and thus help in the mobilization of household savings. By beating a political and an administrative retreat, the UPA government has failed to take advantage of a good scheme. This situation actually reveals why the Congress and the UPA have lost all credibility. It is incapable of implementing its own good ideas. Inducting Nandan Nilekani to work on the project was a good idea but then other considerations made the project wither in the vines, leaving Mr Nilekani with nothing.