How Aadhaar authentication is helping dealers siphon off food rations in Jharkhand

Ration dealers were siphoning off more than half of the grain entitlement of ration cardholders. That is what residents of several villages in Jharkhand’s West Singhbhum district noted at a recent public hearing on the functioning of the public distribution system in the area.

The statements of participants in the hearing showed how beneficiaries are being denied rations by the combination of Aadhaar-based biometric authentication and the reconciliation of stocks based on online records. The corruption is being aided by the fact that ration dealers easily manipulate the online records.

Under the National Food Security Act, every ration cardholder of “priority households” is entitled to 5 kg of grain per month. Those in the Antyodaya category – the poorest category – have a monthly entitlement of 35 kg per card at subsidised prices. In 2020, the Centre launched the Pradhan Mantri Gareeb Kalyan Anna Yojana under which all ration cardholders are entitled to an additional 5 kg grain per person every month for free.

When the cardholders undergo Aadhaar-based biometric authentication, the dealers register the full amount of grain on the point of sale machine but give them only a part of their total entitlement. This is commonly known as quantity fraud.

During the hearing on June 13, organised by the Khadya Suraksha Jan Adhikar Manch, a district-level civil society network working on welfare entitlements, cardholders from Kainuwa village said that they were yet to get rations for September and December even after completing the biometric authentication for these two months.

An assessment of 40 ration cards of the village by the Khadya Suraksha Jan Adhikar Manch, of which the author is a part, shows that the cardholders received 57% of their grain entitlement in February-April. The dealer, however, registered the full amount in the point of sale machine.

Similarly, an assessment of 100 ration cards of San Kuchia village by a team comprising economists Jean Dreze, Reetika Khera and Manch representatives, including this author, shows that cardholders received just 35% of the grain in February and 33% in March even though the full amount was registered by the dealer.

Similar problems have been reported from other districts of Jharkhand in the recent past as well.

An independent survey in the state in 2017 found that cardholders were receiving about 10% less than their entitled amount of rations. This was the case both in offline villages – where the point of sale machine was used in offline mode without biometric authentication – and online ones with biometric authentication. These findings are in stark contrast to the widespread pilferage in the public distribution system.

The Jharkhand public distribution system has been overhauled since the early 2000s, when a large part of the grain did not reach the intended beneficiaries. In 2015, the implementation of the National Food Security Act in the state introduced reforms that increased coverage and created an online portal with details of the scheme. It also simplified entitlements by doing away with the differentiations of people above the poverty line and below the poverty line.

For the current corruption, some blame lies on the lack of clarity on the duration of the Pradhan Mantri Garib Kalyan Anna Yojana. Every few months, the Centre keeps extending the scheme for three to six months. As a result, there is confusion among cardholders about their monthly entitlement.

At the public hearing in June, many cardholders were unaware that they had been entitled to 10 kg grain every month for the last two years. It is a common complaint: “kisi mahine free wala chawal milta hai, aur kisi mahine paise wala” – some months, we get the free rations and some months, we get the Re 1 grain. The dealer exploits this lack of clarity by siphoning off grain.

There are two clear learnings from the current mess in Jharkhand’s public distribution system and they are not new findings.

Aadhaar authentication a flop

Since coming to office in 2014, the Narendra Modi-led government reinvigorated the push by the previous United Progressive Alliance to link Aadhaar, the 12-digit unique identification number for all residents in India linked with their biometric details, with various welfare programmes, including the public distribution system.

The process of linking Aadhaar with ration cards began in 2016 in Jharkhand. In February 2017, Aadhaar was made mandatory to access the public distribution system by the Centre.

This period saw a mass cancellation of ration cards not linked with Aadhaar. The central and state governments repeatedly claimed that crores of bogus and duplicate cards were cancelled, saving crores of rupees.

Since then, inquiries under the Right to Information Act and several studies have shown that a small proportion of the cancelled cards were actually fake. In Jharkhand, lakhs of eligible families were denied grain for months due to the cancellation of their ration card. Unfortunately, members of a family whose Aadhaar is not linked to their ration card continue to be struck off the list.

The exclusion and hassles faced by cardholders during biometric authentication through the point of sale machine have been widely reported on in the past few years. As the current mess indicates, the quantity fraud is of gigantic proportions and cannot be addressed by biometric authentication.

Despite mounting evidence against the Aadhaar-based biometric authentication, the Jharkhand government recently introduced item-wise authentication in the public distribution.

Earlier, cardholders had to authenticate transactions via the point of sale machine only once to get all the items they were entitled to – rice, wheat and salt. But now, they are required to authenticate five times for all five items – rice and wheat under both the National Food Security Act and the Pradhan Mantri Gareeb Kalyan Anna Yojana, and salt.

Technological hurdles

At the public hearing, many dealers reiterated that they were not allocated grain for the months in which they did not distribute rations. The government officials, however, maintained that dealers already had adequate stocks left over from previous months and so were not allocated more grain. While this is a case of corruption, the current process of reconciliation of the stock also has some role to play in the denial of rations.

Along with biometric authentication, the state government began to allocate grain based on the reconciliation of online records. Every few months, the food department reconciles the allocation and distribution records of the ration dealer created on the basis of the biometric authentication of cardholders. In case of offline point of sale machines, the dealers have to get the offline records updated online at the end of the month.

This sounds good – except that this system is broken.

Ration dealers have started manipulating the digital records. They get the biometric authentication of the cardholders but then distribute grain to only some of them. The rest are given excuses and told to collect their rations next month. Sometimes, cardholders are only told, “Ration lapse ho gaya hai” – the grain entitlement has lapsed. The dealers then siphon off the rations left in stock.

The reconciliation of online records shows available stock but the dealers actually have nothing. When the government reduces the allocation for the next month, the cardholders bear the brunt.

Dealers often complain that rations distributed through offline point of sale machines is not updated online on time and, as a result, the online stock detail is not updated. At the public hearing, the officials admitted that some dealers had to face this but had no idea on how to resolve it.

This is a recurring problem since the reconciliation process was introduced a few years ago. Neither has the government resolved this technical glitch and the clear case of theft of grains, nor has it ensured that cardholders do not bear the brunt of this.

Need for action

The evidence points to the need to remove the Aadhaar-based biometric authentication from the public distribution system. The technical glitches related to the digital reconciliation process need to be addressed the earliest. With the introduction of “one nation one ration card”, cardholders may be looking at another technological nightmare in the days to come.

The National Food Security Act lays out a clear grievance redress mechanism for people to complain and for the administration to take appropriate action. At the public hearing, many cardholders said they had registered complaints at various administrative levels, as per the rules of the National Food Security Act, but their grievances were yet to be redressed.

A functional grievance redress mechanism, with strict action against dealers and officials responsible for the denial of grain entitlement, could help put the public distribution system back on track. The scale of the corruption also calls for a state-wide social audit of the public distribution system.

The public distribution is nothing short of a lifeline for a large population in Jharkhand where hunger and undernutrition continue to be grim problems. The denial of rations and other welfare entitlements has even led to starvation deaths in Jharkhand. The need of the hour is to immediately set the public distribution system in order.

Siraj Dutta is an activist based in Jharkhand.