The Delhi government has introduced a biometric system in 42 out of the 2,534 public distribution system (PDS) outlets in the state. As Jean Drèze described it: “This involves installing ‘Point of Sale’ (PoS) machines at PDS shops and verifying cardholders’ identities by matching their fingerprints against the Aadhaar database over the internet. This system requires multiple fragile technologies to work at the same time: the PoS machine, the biometrics, the internet connection, remote servers and often other elements such as the local mobile network. Further, it requires at least some household members to have an Aadhaar number, correctly seeded in the PDS database.”
In September, some economics students from Lady Shri Ram College for Women audited one PDS outlet to assess the impact of the new system. We chose an outlet close to the Supreme Court, serving the poor in Lutyens’s Delhi (an otherwise wealthy area of the capital). The PDS dealer whose outlet we assessed is Shyam Lal Gupta – an elderly man who has been running the Sangli Mess shop on Bhagwan Das Road for 32 years now. His outlet caters to 681 cardholders who live in the spaces between the upmarket properties of Delhi’s elite – in the area from Khan Market to the Supreme Court. According to the data on the Delhi government’s National Food Security website, out of these 681 cardholders, 231 could not buy grains through the new system in August.
We found, as Drèze noted, that the new system can tackle ‘identity fraud’ such as cases involving ‘ghost cards’ – when people use cards issued in the names of people who do not actually exist – since the dealer can no longer show sales made to non-existent people. Incidentally, we found only four cases of ghost cards at the outlet. This is because the dealer can no longer show sales in their name. However, it cannot deal with “quantity fraud”, i.e. when a person with priority card who is entitled to 5kg per person per month receives less than that. This is because in the absence of a credible grievance redressal system the PDS dealers can force people to sign for their full entitlement but give less.
When the system works: underselling and overcharging
Among the households that were able to buy grain successfully through the new system in August, we met 70 households and found that several problems remained: complaints of underselling, overcharging and quality (wheat) were frequent, and remain unaddressed. On average, those who had bought grains through the PoS machine in August received 86% of their entitlements. Out of 49 households that were able to recall their last month’s purchase, 17 received their full entitlement. Out of 70 households, 30 complained of both underselling and overcharging. For instance, Rani, a resident of Copernicus road is entitled to receive 25kg of ration, and she prefers taking only rice, so she receives 15kg rice for which she pays Rs 4/kg instead of the official Rs 3/kg and no wheat.
Out of 70 households, 30 complained of both underselling and overcharging. For instance, Rani, a resident of Copernicus road is entitled to receive 25kg of ration, and she prefers taking only rice, so she receives 15kg rice for which she pays Rs 4/kg instead of the official Rs 3/kg and no wheat.
Inflexible and increased transaction costs
The inflexibility of the new system creates hurdles and hassles in availing benefits. Only family members who are listed on the card (and whose biometrics present no problems) can purchase grains. For instance, Anara Devi who is in her eighties and lives in the Copernicus area of Bhagwan Das road possesses a ration card but due to her persistent ill health, she hasn’t been able to make trips to the fair price shop.
Her grandson explained that she is not fit enough and her fingerprint is unreadable. The family receives no ration and the grandson’s name is not on the ration card even after having submitted the required documents. The lack of any ‘manual override’ in the case of emergencies leaves many in distress, forcing them to forego a month’s ration quota.
Out of 70 households that successfully used the new system in August, 23 households had some technology related complaint – either PoS machine, the internet or the biometrics did not work. Several of those for whom the system works complained of having made multiple trips to the shop. Due to a lack of internet connectivity the dealer sends them back without giving ration. The irregularity in opening days/hours has continued as before. Often household members take a day off work to collect ration and in any of the prior circumstances, it becomes unproductive if they don’t get the ration.
The dealer no longer gives receipts, which was earlier not the case. The similarity between one of the most underdeveloped areas of Jharkhand where PoS has not been introduced and inhabitants of the posh localities in the national capital is that both face quantity fraud and overcharging. PoS hasn’t been successful in tackling these issues.
In a nutshell, when the new system works, it leaves those households for whom it works as they were before – vulnerable to quantity fraud and overcharging.
“No show” cases – bogus cards or exclusion?
Out of the 231 “no show” cases from August, we visited over 100 households. The main purpose of interviewing the ‘no show’ cases was to find out why they had not purchased grain from the PDS outlet in August; was it due to the new system (introduction of PoS machines) or was it because they no longer resided in the area or because these names were ‘ghosts’. The team found only 4 ghosts – people who could not be traced and who no one had heard of. Curiously, there were 11 households on the ‘no show’ list who had bought grain; 13 families had moved and the bulk (57) did not buy for a variety of reasons (lack of cash, of interest, of time, etc.).
Of these 100 households, 15 households encountered problems related to the new system. Of this, there were seven cases of biometric failure. For instance, Rehana Devi, one of those on the no-show list said that the “Dealer sent me away twice without giving me ration because the machine didn’t recognise my fingerprint even after multiple attempts. He said that it is because of henna on my hands. This has happened twice with me.”
Eight households could not buy because they could not meet some other requirement of the new system (for example, a person whose fingerprint was registered wasn’t available, connectivity errors and the like). Uma Cheriyan, who lives in Sangli mess, was admitted to a hospital in August. Since hers is just a two-member family, no one could go to collect the ration and they had to buy grains in the open market for that month.
Our study shows that the ‘no show’ households cannot be automatically treated as ‘ghosts’ as the government has done in the past.
Exclusion due to Aadhaar
The Supreme Court’s orders preventing the government from making Aadhaar compulsory does not seem to have trickled down. On September 14, the Supreme Court stated that “We will also make it clear that the Aadhaar card scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this court one way or the other.”
Out of 357 members of the 70 households that were surveyed, 61 names were missing (i.e. 17% of the names were missing). Though not all exclusions are due to Aadhaar, many such cases were found. Monika, a resident of Copernicus Marg said that earlier all the ten members of her household were on the ration card. Since Aadhaar was introduced, three members have been left out. As a result, the ration that they receive is less than their entitlement as per the law. Kishan Chand’s ration card is in the name of his wife who passed away, he is not on the ration card because he didn’t have an Aadhaar card. Only his 12-year-old daughter is on the ration card but she cannot go to collect the ration.
Aadhaar was sold as a welfare scheme essential to the masses, but what we found in this study in Lutyens’s Delhi is that it is causing a hindrance in implementation of welfare schemes. The new system creates a lot of hassle and does little to solve existing difficulties. The positioning of high-tech machines to counter problems of unsuccessful implementation and corruption seems to have been highly ineffective. The focus perhaps should be on taking simple measures to increase transparency and to introduce flexibility to accommodate outlier cases and needs of the masses.
Shagun and Aditi Priya are students of economics at Lady Shri Ram College for Women.