I remember reading Nandan Nilekani's Imagining India (2010) a few years ago with feverish excitement. Here at last was a sane voice amongst a welter of socialist noises - talking about how technology can be used to aid free markets and to cure India's ills. But Imagining India was essentially a proposal with no hard evidence to back it up. Can technology actually accomplish all that Nilekani promised it would? I was skeptical.
In Rebooting India: Realizing a Billion Aspirations (2015), Nandan Nilekani and Viral Shah show the proof of concept of just how technology can go a long way in aiding governance. One of the goals that the authors focus on (among a basket of varied goals) and which I will describe below is reducing graft and streamlining subsidies.
The initial parts of the book are about how Nilekani and others went about promoting and establishing Aadhar - the unique identification scheme. Conceived in 2009, the UIDAI went ahead to bring almost a billion residents of India into the Aadhar fold within five years. Aadhar is just the stepping stone for big reforms. One such reform is in LPG (cooking gas) subsidy. The original LPG subsidy scheme could be subverted in many ways. But once Aadhar became available, the LPG customer's Aadhar could be linked to their LPG connection.
By the end of 2015, about 120 million customers were linked through their Aadhar card number. In this revised subsidy scheme, the customer pays the full market price for an LPG cylinder and the subsidy is transferred to his bank account (A customer could decline the subsidy if didn't want it). By this simple shift in perspective, over 600,000 duplicate connections were detected and there was an estimated savings of about Rs 6500 crores (Rs 65 billion) in 2015-16.
This Direct Benefits Transfer of LPG (DBTL) scheme (or PaHaL as it is called in Hindi) is not the only possible use of Aadhar. At the present moment, the PDS scheme is also being linked to Aadhar which will lead to elimination of graft in the PDS system. Later fertilizer, water and electricity subsidies for farmers will be through the Aadhar route. This will enable streamlined deliver of subsidies to the deserving poor.
An Aadhar enabled bank account would also help in merit scholarship schemes, insurance schemes for the poor, pension payments, housing schemes etc.
Since each resident is provided with a unique Aadhar number (made unique by fingerprints and iris scans) it would be difficult to come up with duplicate accounts thus allowing transparency in the system.
While Nilekani and Shah devote a considerable portion of the book to welfare schemes, they understand that subsidies and other welfare schemes distort the free market and the pricing system. Hence they say that subsidies should only be provided to deserving recipients through targeted cash transfer programmes which is now possible through Aadhar linked bank accounts. This will also reduce the government's subsidy burden and allow it to concentrate on infrastructure development.
Other than welfare schemes, Nilekani and Shah talk about electronic toll payments at toll bridges, e-KYC, the Goods and Service Tax Network (GSTN), helping children learn through use of technology (MOOCs/flipped classrooms) and reforming the power sector and the judicial system. They even talk of a digital locket system which will hold all our documents electronically in a single secure place. These are, again, proposals which can be attempted given the grand success of the DBTL scheme.
In the present age, the mobile phone has transformed society to a great extent and Nilekani and Shah place a lot of hope in the JAM (Jan Dhan bank account, Aadhar and mobile phone) structure to level the playing field for the poor in India. The new Unified Payments Interface (UPI) which has just been launched a few months ago is widely heralded as a game changer in transforming India to a cashless society. As the authors state: "The goal of the UPI is to create a single, seamless platform for any kind of electronic transaction, whether it's payments from the government (subsidies, for example), payments to the government (taxes), payments from customers to vendors, and ultimately even money transfers between two individuals." And all this can be done over the mobile phone!
A well-written book, with informative diagrams, the book lays a blue print for restructuring India through the massive use of technology and making India data-rich that future governments will do well to heed.
In Rebooting India: Realizing a Billion Aspirations (2015), Nandan Nilekani and Viral Shah show the proof of concept of just how technology can go a long way in aiding governance. One of the goals that the authors focus on (among a basket of varied goals) and which I will describe below is reducing graft and streamlining subsidies.
The initial parts of the book are about how Nilekani and others went about promoting and establishing Aadhar - the unique identification scheme. Conceived in 2009, the UIDAI went ahead to bring almost a billion residents of India into the Aadhar fold within five years. Aadhar is just the stepping stone for big reforms. One such reform is in LPG (cooking gas) subsidy. The original LPG subsidy scheme could be subverted in many ways. But once Aadhar became available, the LPG customer's Aadhar could be linked to their LPG connection.
By the end of 2015, about 120 million customers were linked through their Aadhar card number. In this revised subsidy scheme, the customer pays the full market price for an LPG cylinder and the subsidy is transferred to his bank account (A customer could decline the subsidy if didn't want it). By this simple shift in perspective, over 600,000 duplicate connections were detected and there was an estimated savings of about Rs 6500 crores (Rs 65 billion) in 2015-16.
This Direct Benefits Transfer of LPG (DBTL) scheme (or PaHaL as it is called in Hindi) is not the only possible use of Aadhar. At the present moment, the PDS scheme is also being linked to Aadhar which will lead to elimination of graft in the PDS system. Later fertilizer, water and electricity subsidies for farmers will be through the Aadhar route. This will enable streamlined deliver of subsidies to the deserving poor.
An Aadhar enabled bank account would also help in merit scholarship schemes, insurance schemes for the poor, pension payments, housing schemes etc.
Since each resident is provided with a unique Aadhar number (made unique by fingerprints and iris scans) it would be difficult to come up with duplicate accounts thus allowing transparency in the system.
While Nilekani and Shah devote a considerable portion of the book to welfare schemes, they understand that subsidies and other welfare schemes distort the free market and the pricing system. Hence they say that subsidies should only be provided to deserving recipients through targeted cash transfer programmes which is now possible through Aadhar linked bank accounts. This will also reduce the government's subsidy burden and allow it to concentrate on infrastructure development.
Other than welfare schemes, Nilekani and Shah talk about electronic toll payments at toll bridges, e-KYC, the Goods and Service Tax Network (GSTN), helping children learn through use of technology (MOOCs/flipped classrooms) and reforming the power sector and the judicial system. They even talk of a digital locket system which will hold all our documents electronically in a single secure place. These are, again, proposals which can be attempted given the grand success of the DBTL scheme.
In the present age, the mobile phone has transformed society to a great extent and Nilekani and Shah place a lot of hope in the JAM (Jan Dhan bank account, Aadhar and mobile phone) structure to level the playing field for the poor in India. The new Unified Payments Interface (UPI) which has just been launched a few months ago is widely heralded as a game changer in transforming India to a cashless society. As the authors state: "The goal of the UPI is to create a single, seamless platform for any kind of electronic transaction, whether it's payments from the government (subsidies, for example), payments to the government (taxes), payments from customers to vendors, and ultimately even money transfers between two individuals." And all this can be done over the mobile phone!
A well-written book, with informative diagrams, the book lays a blue print for restructuring India through the massive use of technology and making India data-rich that future governments will do well to heed.
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