It could, indeed, emerge as the basis for a real transition of an economy predominantly operating on cash today, to one where even the poorest of Indians can receive or make payments electronically. To lend traction to the process, a Task Force headed by Nandan Nilekani — Chairman of the Unique Identification Authority of India (UIDAI) and author of the Aadhaar idea — has recommended that payments for all government transactions above Rs 1,000 be done through electronic transfers, involving neither cash nor cheques. This may be enforced especially in respect of disbursements against subsidies and various welfare schemes, which add up to well over Rs 300,000 crore annually.Crore = ten million. Rs 300,000 crore is three trillion rupees. 3,000,000,000,000.00 INR = 60,932,932,375.40 USD. That's sixty-one billion dollars, distributed, in large part, in cash because the intended recipients don't have bank accounts.
It can't come as a surprise that there are large leakages from such a system. How big are they? Nobody knows.
So what would it cost to give everyone a UID number enabling access to the banking system?
Aadhaar project mission director Ram Sewak Sharma recently estimated that the total cost could come in under Rs 18,000 crore (US $3.7 Billion).
If we double the estimated total cost of UID and assume that 12% of the budget for transfers can be saved, UID would pay for itself in... one year.
If only one percent of the welfare budget can be saved, the project would pay for itself in twelve years, even if it costs twice as much as expected to implement. So, even in the narrow, financial perspective of return on investment, UID sells itself.
But rupees, even lakhs of crore of them, are only a very narrow metric for gauging UID's value.
The demoralizing effects of the corruption, abuse and fraud that thrive in the absence of accountability are impossible to measure with money; they're measured in misery. If UID succeeds, the benefits of UID's implementation will also be impossible to measure in currency units.
Biometrics are a powerful institution-building, tool.
