Tag Archives: Chidambaram

How Realistic is Chidambaram’s ATM Promise?

The Union Budget for 2013-14, presented by the finance minister of India, P Chidambaram, has been thoroughly analyzed by analysts, media and economists. Many have pointed out the fine prints, and there are loads and loads of analysis on what it would do to Indian economy, different sectors, and different sections of our demographics.

But in all these discussions that I have eagerly followed, I am yet to come across any comments on one of his promises: that every public sector bank branch would have an ATM by March 2014. This is what the FM said in his budget speech (see section 86)

Financial inclusion has made rapid strides. All scheduled commercial banks and all RRBs are on core banking solution (CBS) and on the electronic payment systems (NEFT and RTGS). We are working with RBI and NABARD to bring all other banks, including some cooperative banks, on CBS and e-payment systems by 31.12.2013. Public sector banks have assured me that all their branches will have an ATM in place by 31.3.2014

I know it is neither as serious a matter for economists as current account deficit nor as interesting for everyone as an all women’s bank branch. It does not impact as many people directly as the tax slabs; neither does it have enough controversy in it to deserve comments from politicians.

Yet, this part of the speech got my natural attention, when I was listening to the speech live on TV. Having been a little familiar with the current numbers—thanks to my twin interests, payment systems and data journalism (lots of my tweets are around these numbers)—I was finding the target a little too ambitious. 

So, I got into some extraction of numbers and a quick analysis of those numbers. And here is what the FM’s promise translates into. 

By the end of March 2012 (that is end of FY 12), India had 67,466 PSU bank branches. That may not be such a huge number when seen in context with Indian population. But the number of ATMs that were attached to some of these branches (called onsite ATMs in Indian banking parlance), were much less. All PSU banks together had only 34,012 onsite ATMs. That number, of course, increased to 36,767 by December 2012.

The public sector banks have, on an average, added a little more than 3500 branches per year in the last five years leading to FY 12. So, even by a conservative estimates, the PSU banks are likely to have not less than 72,000 branches by the end of March 2014—the reference date for the FM for all of those branches having an ATM.

So, going by the current numbers, 35, 233 onsite ATMs need to be added between 31 December 2012 and 31 March 2014 (15 months) for all the PSU branches to have an ATM. That is almost doubling (96% growth, to be precise) the onsite ATM base in PSU banks.

Do you think it is realistic? Especially, when you consider that between March 2007 to March 2012, they have added 23,723 onsite ATMs. And there is no major acceleration considering in the nine months after that—that is between March 2012 to December 2012—they have added only 2755 onsite ATMs.

So, there are only three possibilities. One, I am terribly wrong somewhere. Two, there is something happening inside which we don’t know. And three, the FM has just been carried away without caring too much to be realistic. After all, it is an election budget.

The first possibility is inconsequential. The second possibility calls for a celebration.

The third possibility is  a dangerous proposition. I thought whether the Budget is good or bad in a year, at least the basic arithmetics gets done to put the ends together. 

There is one more probability. Maybe, the FM was wrong but only technically. Maybe, he meant that for every branch of PSU bank, there would be an ATM. What it means is that the number of PSU branches and no of PSU ATMs would be same, irrespective of where those ATMs are located. If we go by that number, the total ATMs (both onsite and offsite put together), they have 63, 739 ATMs. That means in the next 15 months, going by the same estimated number of branches (72,000), they need to add 8261 ATMs, slightly aggressive going by the last five years’ numbers but not exactly unrealistic.

So, the FM’s speech should have read

Public sector banks have assured me that for each of the branches that they have, they will have one ATM in place by 31.3.2014

And that is no less laudable goal to have. Since the FM talked about the ATMs in the context of financial inclusion, how does it matter if the ATM is “in the branch” or anywhere else?

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National Citizen Database/Unique ID: Is Chidambaram Speaking the BJP Language?

It is ironic. The Bharatiya Janata Party (BJP) may be baying for his blood after Madras High Court rejected Union Home Minister P Chidambaram’s Plea in his Lok Sabha election case, but the minister is actually fighting a bitter battle within his own government to implement a plan that was, by all means, envisioned by the BJP.

A large section of media has reported that the home minister has complained to thePrime Minister about the Unique Identification Authority of India (UIDAI) (part of Planning Commission) not cooperating with the Registrar General of India (RGI) (under Home Ministry) in a letter. Both are collecting biometrics based data of people–UIDAI for issuing Aadhar numbers and RGI for its National Population Register (NPR)

In a report today, this is what Mint said

In his letter to Prime Minister Manmohan Singh last week, Chidambaram accused the Nandan Nilekani-led UIDAI of not following the 27 January cabinet decision where it was agreed that the purposes of UIDAI and the home ministry-led National Population Register (NPR) project were different. Under this truce, both projects were to continue simultaneously and each would use the biometric data collected by the other. Also, in case of discrepancies between UIDAI and NPR data, NPR would prevail.

“Despite these directions from the government of India, UIDAI is objecting to the conduct of the NPR camps in certain states and is also refusing to accept the biometric data of NPR for de-duplication and generation of (the) Aadhaar numbers,” he said in the letter, which was reviewed by Mint.

“The decision of the cabinet is crystal clear and I am unable to comprehend the reluctance of UIDAI to allow the NPR camps and to accept the NPR data. I had taken these issues with Nandan Nilekani, chairman, UIDAI, dated 14.05.12. The home secretary (R.K. Singh) has also discussed the issue at length with the UIDAI director general and mission director. However, despite our best efforts, issues remain unresolved,” he said.

On the face of it, the fight seems to be about the data collection. But there is a bigger issue. And no, it is not about ego clash between Chidambaram and Montek Singh Ahluwalia. Or if it is, we do not know that. The big issue is that while both UIDAI/Aadhar and NPR are collecting data for creating citizen databases, their objectives are entirely different. And hence the details vary. While it certainly is a laudable idea that there should be no duplication of efforts and national resources for doing similar kind of work, it requires more than a cabinet meeting to pan out how that could be done. Else, the cabinet decision is like a patchwork; pushing the dirt under the carpet.

Without getting into too much details, there are certain important differences that must be pointed out.

One, the sacrosanct thing in the Aadhar number  is the number. There is a card but that is like a PAN card. The card is just a piece of plastic. It is the number that matters. On the other hand, the citizen card would be like a passport (or so it is believed). It is not just the number but the physical document that is important.

Two, the Aadhar number is not mandatory; the citizen card would be mandatory. That is a major difference.

Three, the Aadhar number—since its main aim is to facilitate the smooth access to services like banking—could be issued to anyone residing in India, even a foreigner. The citizen card of NPR is a proof of citizenship.

The above two characteristics of UID together ensure that the Aadhar number is neither a necessary nor a sufficient condition to citizenship of India. That is the whole purpose of the resident identity card of NPR.

These differences are fundamental. The Aadhaar project was launched by UPA to ensure financial inclusion, which was a big requirement for achieving social inclusion, UPA’s top election promise. The way in which NPR is being projected suggests that central to it is security. “The resident identity card programme was launched in India’s nine coastal states after the 2008 Mumbai terrorist attacks. The home ministry is seeking to extend the scheme to the rest of the country and has sought Rs. 6,700 crore to fund the program,” reported Mint.

Interestingly, this is what was originally BJP’s idea. In a story that I did in Dataquest, way back in January 2010, I had pointed this out. Calling it “Inclusion Vs Security”, I argued that while the central idea behind BJP’s national citizen database was security, it was inclusion that drove UPA’s agenda when it created UIDAI.   “While it is true that it was the NDA government that had taken the first step on creating a national identity system, its objective was entirely different,” I wrote. I cited an August 2003 press release issued by PIB on this.

“Illegal migration has assumed serious proportions. There should be compulsory registration of citizens and non-citizens living in India. This will facilitate preparation of a national register of citizens. All citizens should be given a Multi-purpose National Identity Card (MNIC) and non-citizens should be issued identity cards of a different color and design. This should be introduced initially in the border districts or may be in a 20 Kms border belt and extended to the hinterland progressively. The Central Government should meet the full cost of the identity card scheme”.

This is exactly what Chidambaram’s home ministry is now talking about. In fact, even in 2009, BJP’s Elections Manifesto had an IT vision in which a lot of emphasis was laid on this (MNIC).  It claimed that the centrepiece of the implementation of the BJP’s IT Vision is the Multipurpose National Identity Card (MNIC). This is what the vision document said.

We would amend the Citizenship Act, 1955, to combine the offices of the Registrar General of the Census of India and that of the UIAI to set up a Citizenship Regulatory Authority of India (CRAI). The CRAI would be responsible for maintaining a National Register of Citizenship (NRC), and keeping it current up to the minute.

This is what the BJP IT vision said further.

The amended Citizenship Act would make it mandatory under law for all citizens to acquire an MNIC, and parents of newly born infants would have to apply for one for their child, immediately after the baby’s birth.

So, whether it is the “mandatory” requirement, NPR (BJP’s NRC) or starting with coastal areas (BJP’s border belt), the home ministry idea is an exact reflection of what BJP wanted. In fact, these differences were also the basis of the Parliamentary Standing Committee on Finance headed by BJP MP and ex FM Yershwant Sinha for sending back the National Identification Authority of India Bill, 2010. “The Committee have received a number of suggestions for restricting the scope of the UID scheme only to the citizens and for considering better options available with the Government by issuing Multi-Purpose National Identity Cards (MNICs) as a more acceptable alternative,” it noted. MNIC was BJP’s phrase.

What Chidambaram’s home ministry is doing is to reintroduce BJP’s plan under a different name. Not surprising considering Chidambaram has been a hardliner when it comes to security.

So, which one is a better objective? There is no straight answer to that question. But as I had pointed out in another story, The Politics of Identity, in Dataquest after the Sinha-headed committee sent back the bill, “the primary objectives of the two projects, though their means are the same, are completely different. To measure one with the yardstick of the other, is not just unfair but would never yield any result.”

Even if one can debate this versus that, it is too late to do that as the government has decided to go for both. The good idea is that someone is thinking about minimizing on the national resources. But that is easier said than done.

While I did point out the fundamental differences between the two projects above, there are some more differences that have come the way that the two are being implemented. And while they are less sacrosanct to be changed, they need to be examined before one tries to work out a synergy.

One, UIDAI, in its wisdom, has decided that it would respect citizen’s privacy, something that is traditionally not a big issue in India but increasingly, citizens are getting more concerned about their privacy. UIDAI has taken a proactive stance on that. So, it is looking at collecting only the essential information for identifying and no more. NPR wants to have all the information and still operates with philosophy that government has all the rights  over citizen. While that is essential for somebody trying to ensure security, it should happen only when the government ensures that there is no information leakage.

Two, UIDAI has taken a mission/marketing approach rather than a typical government mandated top-down approach. It has marketed the program, got buy-ins from partners and has shown the benefits accrued to each stakeholder such as banks, telcos and state governments because of Aadhaar. By doing so, not only has it created a feeling of ownership, it has managed to share the cost of collection of data. NPR wants to do a massive centralized exercise.

While it is true that both are trying to collect similar data and hence should cooperate with each other to avoid wasting of national resources, it cannot just be wishful thinking. It has to be planned out properly. One thing about Aadhaar project is that, all its small flaws notwithstanding, it is fairly thought through program. It is halfway. The Finance Minister Pranab Mukherjee has emphasized its significance many times. Most of the development programs of the government now use Aadhaar as a platform. In fact, this year’s Budget speech had as many as nine reference to Aadhaar. So, you cannot do something that creates problems for UID project. That will affect all these development programs.

But NPR, even though it is an original BJP idea, is an important requirement too for security. And the fact that the government has decided to pursue it with all seriousness means going back in not an option. Certainly, duplication of efforts is certainly not a great idea.

The two projects have no option but to find synergies. But it cannot just be wishful thinking. It has to be thought through further. It requires more than a cabinet meeting or a letter by the Prime Minister for that.

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