Macro/Finance Group, NIPFP

This study estimates the costs and benefits of Aadhaar. We find that substantial benefits would accrue to the government by integrating Aadhaar with schemes such as PDS, MNREGS, fertiliser and LPG subsidies, as well as housing, education and health programmes. The benefits arise from the reduction in leakages that occur due to identification and authentication issues. Our analysis takes into account the costs of developing and maintaining Aadhaar, and of integrating Aadhaar with the schemes over the next ten years. Even after taking all costs into account, and making modest assumptions about leakages, of about 7-12 percent of the value of the transfer/subsidy, we find that the Aadhaar project would yield an internal rate of return of 52.85 percent to the government.

Links

• Paper
• Spreadsheet
• Presentation video

Press

• On the NIPFP Response by Reetika Khera, in the Economic and Political Weekly, 9^th March 2013.
• Response to 'A Cost-Benefit Analysis of UID' by Sumathi Chandrashekaran, Shekhar H Kumar, Smriti Parsheera, Ila Patnaik, Madhavi Pundit, Suyash Rai and Ajay Shah, in the Economic and Political Weekly, 9^th March 2013.
• A 'Cost-Benefit' Analysis of UID by Reetika Khera, in the Economic and Political Weekly, 2^nd February 2013.
• Identify this by Ila Patnaik, in the Indian Express, 3^rd December 2012.
• Aadhaar-based cash transfer benefits to rise gradually in the Business Standard, 3^rd December 2012.
• NIPFP study finds large returns from Aadhaar project by Ila Patnaik, on her blog, 15^th November 2012.
• The IRR of UIDAI is over 50 per cent in real terms by Ajay Shah, on his blog, 15^th November 2012.
• Grim Reality by Nandan Nilekani, in the Financial Express, 14^th November 2012.
• NIPFP Study finds large returns from Aadhaar project, Press Information Bureau, Government of India, 10^th November 2012.
• NIPFP study says large returns expected from Aadhaar project in the Business Line, 10^th November 2012.