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Narendra Modi’s Financial dream,progress Slows down

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By Himadri Ghosh

“Never before in economic history would 15 million bank accounts have been opened on a single day. Never before has the Government of organized a program of such scale,” Prime Minister Modi said on August 28, 2014, launching the Pradhan Mantri Jan Dhan Yojana (Prime Minister’s People’s Wealth Programme/PMJDY).Seventeen months later, in January 2016, the scheme reached all Indian households, according to official data, bringing 200 million additional families to the banking system.

But the primary goal, direct transfer of government subsidies to people, has not overcome two challenges: linking the unique identification (Aadhaar) card to PMJDY; and getting beneficiaries to use the bank account. The speed of adding accounts, as IndiaSpend reported earlier, was outpacing the delivery of benefits, and Reserve (RBI) governor Raghuram Rajan, in 2014, cautioned banks against focussing on numbers alone.

Less than half the 210 million Jan Dhan accounts were seeded with Aadhaar as of January 31, 2016, the data indicates. More than 30 percent of these accounts have been at “zero balance”, meaning the account holder was not using the account.

States struggling to link Aadhaar to PMJDY include Andhra Pradesh, Chhattisgarh, Jharkhand Karnataka, Kerala and Maharashtra. These states together linked less than 40 percent accounts to Aadhaar.

It is important that these states fall in line, as subsidies on cooking fuel, auto fuel and food grain impose a multibillion-rupee subsidy burden, the government has said.

The government is estimated to have spent Rs.266,700 crore ($45 billion) on subsidies in 2015, of which Rs.122,700 crore ($20 billion) was spent on food, Rs.71,000 crore ($12 billion) on fertilizer and Rs.60,300 crore ($9 billion) on oil.

Up to half of these subsidies are misappropriated, according to various estimates.

“One of the biggest reforms that India has embarked upon is moving to a market-pricing mechanism across a variety of products such as cooking fuels, auto fuels, food grains and fertilizers,” a Kotak strategy report said.

‘A policy does not work by itself?people must know how to use it’

“It takes time to properly implement policies in India, more so for financial schemes like PMJDY as a lot of people are unaware of words like bank, loan, subsidy,” said Santosh Kumar, professor of public policy and administration at FLAME University, Pune.

The integration of PMJDY, Aadhaar and Mobile (JAM) could be an important component of structural reforms. The idea of JAM, as propounded in the 2015 Economic Survey and the union budget, was to identify the beneficiary and deposit subsidies directly into his/her bank account.

“A policy does not work by itself,” said Kumar. “The government must have a strong political will to implement the policy properly by scrubbing it of discrepancies.”

“There are two aspects to financial inclusion: one is bank accounts and the second is access to credit. The scheme announced by the prime minister addresses the first problem. The issue of making credit available to small borrowers remains,” wrote C. Rangarajan, former chairman of the Economic Advisory Council to the prime minister, in The Hindu.

An article published by RBI in May 2013 revealed that more than 42 percent of rural credit is sourced from non-institutional agencies. “Rural credit markets in India is characterized by the coexistence of both formal and informal sources of finance and the market is fragmented,” RBI concluded after four rounds of survey.

“The scheme is a step forward but a lot needs to be done before calling it successful,” said Anindita Roy Saha, associate professor of economics at Delhi University. “People from rural and urban areas need to be treated separately. For achieving the objectives, people should be educated about the financial system.”

The United Progressive Alliance (UPA) government had opened nearly 60 million so-called no-frills accounts, but RBI data have shown that more than half of them remained dormant.

“The basic idea of financial inclusion is to include most of the vulnerable sections of society in the banking system,” said Kumar. “People need to know the potential of the scheme and the documents they have in possession; otherwise, they can’t exercise their rights.” (IANS/indiaspend.org)

 

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Aadhaar Data Breach Report Incorrect: High Court

Citing the top court's judgement, the petitioner said that when the state violates the constitutional rights of a citizen, courts may award compensation

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Aadhaar Card Logo. Image Source: Wikimedia Commons

The Unique Identification Authority of India (UIDAI) on Thursday told the Delhi High Court that reports regarding security breach of data related to Aadhaar is incorrect and misleading as the strongest encryption technology has been used to store data which is impossible to decrypt.

“The technology used is 2048-bit encryption, which is the strongest one and it is impossible to decrypt and extract any information even if enrolment packets were accessible during transit to the UIDAI data centre,” UIDAI told a bench of Justice S. Ravindra Bhat and Justice Prateek Jalan.

The bench was hearing a plea seeking exemplary damages for the losses caused due to leakage of Aadhaar data.

The plea was filed by Shamnad Basheer alleging that the dissemination of personal information of Aadhaar holders made it clear that the government is responsible for any breach of right to informational privacy.

E-Aadhaar card.

In an affidavit, the government agecy said that Aadhaar data is fully secured at all times and for further strengthening of security and privacy of data, security audits are conducted on regular basis, and all possible steps are taken to make the data safer and protected.

It further added that there are multiple layers of security at physical level in UIDAI data centres and is being managed by armed Central Industrial Security Force (CISF) personnel round-the-clock.

“The technical architecture of Aadhaar has been structured in such a way, so as to ensure clear data verification, authentication and de-duplication, while ensuring a high level of privacy and information security,” the UIDAI said.

“UIDAI has taken all necessary safeguards, starting from providing standardised software that encrypts the entire data even before saving it to any disk; protecting data using tamper-proofing; identifying every operator in all and every enrolment; and identifying every one of the thousands of machines using an unique registration process, which ensures every encrypted data is tracked,” read the reply copy filed by the UIDAI.

Countering Basheer’s claim, the agency also said that the petitioner is trying to re-agitate the same issues which have attained finality before the Supreme Court and therefore the present petition deserves to be dismissed with costs.

Aadhaar Card. Image Source: Wikimedia Commons

It said that the petition is based on a mere assumption that the general public is likely to be aggrieved.

“In the entire petition, there is not even a mention as to how the petitioner is aggrieved by the actions of the UIDAI and how his constitutional rights have been violated to entitle him to damages claimed by him,” the UIDAI said.

Adding that there is no merit in the application, UIDAI, in its reply, said: “The alleged facts (leakage of Aadhaar data) on the basis of which the petitioner has filed the plea are unsubstantiated statements and the information relating to the Aadhaar scheme has been grossly misreported and interpolated to mislead this court.

“The petitioner has pivoted his entire case around the misleading and unverified reports in the media regarding security breach of data related to Aadhaar, which is entirely denied as incorrect and misinformed.”

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The agency requested the court to dismiss the plea with cost as the petitioner has no locus standi to file this application.

The petitioner has said his constitutional rights have been violated due to the negligence of UIDAI.

Citing the top court’s judgement, the petitioner said that when the state violates the constitutional rights of a citizen, courts may award compensation.

Basheer has also requested the court to appoint an independent committee comprising multiple experts to investigate the scope, extent of breaches and the magnitude of harm caused due to data leak. (IANS)