Aadhaar-based disbursal of subsidised ration is opening new avenues for corruption in Rajasthan, said Nikhil Dey of People’s Action for Employment Guarantee (PAEG). Dey was speaking to journalists at a conference organised by a group of civil society organisations to discuss 2016 budget allocation to the social sector.

Though the government is banking heavily on Aadhaar linked point of sale (PoS) devices for curbing leakages in food distribution network, only 20 to 40 percent of ration disbursal is being done through these devices because either the devices don’t work or the connectivity is poor, Dey said.

Unable to authenticate the usage of Aadhaar, the fair price shop (FPS) dealers are manually disbursing ration, maintaining a record of the transaction in a dairy. Hence almost 60 percent of ration disbursal is being done manually, exposing the fraught distribution network to greater corruption.

“The authentication process through Aadhaar linked PoS devices takes up to eight minutes. Long queues are being seen at FPS and many people go back as devices stop working. The situation is the same across all districts. The district magistrates tell us that the system will function optimally with better machines and connectivity,” Dey added.

Under National Food Security Act (NFSA), 2013, states provide three kilogram of wheat and two kilogram of rice to each member of a beneficiary household. They can provide these either in kind, after doing end-to-end computerisation of the whole PDS network, or they can opt for cash transfer, where the subsidy amount is transferred in their bank account.

In its report, a high level committee headed by Shanta Kumar noted that the leakages in the PDS system are as high as 50 percent in some states. He recommended phasing out manual system by cash transfer. The move would save close to Rs 30,000 crore annually in food subsidy.

Lok Sabha recently passed Aadhaar Bill, which mandates UID number for receiving any subsidy, benefit or service.

"Soon the disbursal of ration will only happen after Aadhaar authentication.  If the PoS devices continue to malfunction, many beneficiaries will not receive ration. That will be a huge saving for the government”, said Dey.  He demanded that Aadhaar shouldn’t be linked to food distribution.