Aadhaar: A bit of resin is putting India’s welfare system at risk


Prime Minister Narendra Modi’s model of welfarism isn’t new to India: Previous leaders have also subsidized food and fuel, and given the rural poor houses, toilets, and paid work. Modi’s edge comes from technology.

A year before the 2014 election that brought him to power, the government, then led by the Congress Party, had piloted direct cash transfer to beneficiaries, inspired by the former Brazilian President Lula da Silva’s popular Bolsa Familia program. Modi took that modest $1 billion start and turned it into a $300 billion vote magnet: And he did it with the help of 12-digit numbers.

Those numbers — and the ID cards that carry them — are known as “Aadhaar.” It’s a biometrics-based system through which almost everyone in the second-most-populous nation can prove who they are. Aadhaar, which means “foundation” in Hindi, supports 450 million-plus no-frills savings accounts and has bolstered the use of mobile internet for financial transactions even in remote villages. Five years ago, the Nobel Prize-winning economist Paul Romer endorsed Aadhaar as a template for the world.

Increasingly, though, it’s beginning to look like there’s a fair bit of epoxy putty — quite literally — in the very foundation of Modi’s welfare program.