Aadhaar is good governance and needs to be replicated, says World Bank

Government claims that through Aadhaar-linked bank accounts, it is saving Rs.15,000 cr subsidy

GN Bureau | January 14, 2016



The government should be pleased with this report of the World Bank. It has said that India is on track to register its entire 1.25 billion population using its Aadhaar digital ID and this would help the government promote the inclusion of disadvantaged groups in its welfare schemes.

"Technology can be transformational. A digital identification system such as India's Aadhaar, by overcoming complex information problems, helps willing governments to promote the inclusion of disadvantaged groups," the World Bank said 'World Development Report 2016: Digital Dividends.

The bank has said the unique identification number or Aadhaar is worthy of replication by other countries as an example of technology leading to economic transformation.

“If India can provide unique digital identification to 1 billion people in five years, and thereby reduce corruption by billions of dollars, why can’t other countries replicate its success?” said the bank in its report.

The supreme court has restricted the use of Aadhaar numbers to certain schemes through two orders issued last year.

These schemes are: the public distribution system, distribution of cooking gas and kerosene, the rural jobs guarantee scheme, the Pradhan Mantri Jan Dhan Yojana, central and state government pensions, and the Employees’ Provident Fund Scheme.

The government claims that through Aadhaar-linked bank accounts, it is saving Rs.15,000 crore a year in liquefied petroleum gas subsidy.

It also plans to streamline other direct benefit transfer (DBT) schemes and implement DBT of kerosene by 1 April across the country.

The report noted that digital technologies can promote inclusion, efficiency, and innovation. The report said that while the Internet, mobile phones and other digital technologies are spreading rapidly throughout the developing world, the anticipated digital dividends of higher growth, more jobs, and better public services have fallen short of expectations, and 60% of the world's population remains excluded from the ever-expanding digital economy.

"Digital technologies are transforming the worlds of business, work, and government," said Jim Yong Kim, President of the World Bank Group.

"We must continue to connect everyone and leave no one behind because the cost of lost opportunities is enormous. But for digital dividends to be widely shared among all parts of society, countries also need to improve their business climate, invest in people's education and health, and promote good governance," he said.

Kaushik Basu, World Bank Chief Economist said it is an amazing transformation that today 40% of the world's population is connected by the internet.

"While these achievements are to be celebrated, this is also an ooccasion to be mindful that we do not create a new underclass. With nearly 20% of the world's population unable to read and write, the spread of digital technologies alone is unlikely to spell the end of the global knowledge divide," he said.

More than 40% of adults in East Africa pay their utility bills using a mobile phone.

There are eight million entrepreneurs in China-one-third of them women-who use an e-commerce platform to sell goods nationally and export to 120 countries. India has provided unique digital identification to nearly one billion people in five years, and increased access and reduced corruption in public services.

China has the largest number of Internet users, followed by the United States and India, according to the report.

The report, which explores the impact of Internet and digital technologies on development, noted that while digital technologies have spread rapidly, dividends from them have lagged.

Despite many individual successes, technology’s effect on global productivity, expansion of opportunity for the poor and the middle class, and the spread of accountable governance has fallen short of expectations.

How a society takes advantage of information technology depends on what kind of a society it is, the report concluded.

Women are discouraged from going online in some countries, the report found, and across the countries of South Asia, they were far less likely to own a mobile phone. Those who are illiterate — still 20 percent of the world’s population — cannot take advantage of the Internet at all; and in the developing world, the technology industry employs barely 1 percent of the work force. In rich countries, technology employs 3 to 5 percent of the work force, still a small fraction of total employment.

According to the bank’s survey, more than half of all countries had privacy laws on the books, but only 51 of them were in the developing world.

The bank, which says it has itself invested $12.6 billion in information technology projects, calls on countries to make the Internet “universal, affordable, open and safe.” Yet it also takes pains to say that expanding access will not be enough for citizens to take advantage of the benefits. It also recommends enabling companies to compete, strengthening the skills of workers so they can obtain the new jobs and making government institutions accountable.

“The triple complements — a favorable business climate, strong human capital and good governance — will sound familiar — and they should because they are the foundation of economic development,” the report concluded.

Full report:  click here

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