Aadhaar sets stage for cash transfers

New Delhi: In line with finance minister Pranab Mukherjee’s budget announcement on Monday that the government is looking at direct cash transfers as an alternative to the current subsidy on kerosene and fertilizers and to prevent leakages, the Unique Identification Authority of India (UIDAI) is planning to open Aadhaar-linked bank accounts for the purpose. These can be used for other financial transactions as well.  The authority is in the process of empanelling banks that will open “no-frills accounts” or link existing ones, during enrolments for Aadhaar, as the unique ID programme is called. So far, UIDAI has enrolled around three million people and around 80% of them seek bank accounts.  UIDAI’s tender document states that the bank opening the account should have the capability to “provide electronic interface to facilitate disbursal of government benefits... Government may provide a list of Aadhaar numbers and amounts to the bank, and bank should be capable of routing payments to the linked bank account through an interoperable network”.  While the banks will be empanelled by April, the accounts are likely to be opened by May. UIDAI chairman Nandan Nilekani also heads a task force that’s working out the modalities for the proposed direct transfer of subsidy for kerosene and fertilizers, apart from liquefied petroleum gas (LPG).