Nandan Nilekani the former chairman of UIDAI, in his recent interaction, said that Aadhar Card will give a Kickstart to the economy. According to him, Aadhar will be a ladder for the Indian Financial System to democratise the credit system of the country. To read this entire Aadhar News further Click Here
Or you can take a look at the summarized and easy to understand explanation below.
Aadhar News: Aadhar Card to Help Boost the Economy?
For a very long period of time, the Government of India is trying to financially uplift those sectors of the society which hold a large percentage of the population. These sectors include farmers, small scale industries and self-employed professional groups. Even after several attempts in terms of subsidies and tax exemptions, these sectors have failed to grow to the expected level. These sectors provide employment to a large percentage of the population but has a low contribution in the GDP (Gross Domestic Product) of the country.
Do Note: For now the Aadhar Card is not a mandatory document – Read more about it over here
Need for Aadhar Bill
The credit system of the country has faced many obstructions for past many years and is still suffering, because of which discouraging private and foreign investment. The recent economic survey called this problem as Twin Balance Problem. This problem is because of the existence of the small number of large borrowers and lenders according to the UIDAI chairman. Following are the need for Aadhar Bill:
1. Credit Scheme Benefits:
The benefits of the credits aren’treaching to the most lower section of these groups. Even after introducing several schemes the poor is unable to take advantages of them. The Aadhar Card will help in providing easy access to credit to the millions of potential individuals.
2. Subsidies Benefit:
We all know that the LPG subsidies are directly delivered to the Aadhar Linked – Bank accounts of the consumers. Just like LPG subsidy is linked with Aadhar Card, with the Aadhar Bill various subsidies like kerosene, fertiliser, food, water etc. will also be linked to it in future.
Click Here to Read about Linking Aadhar for LPG Subsidy
Click Here to Read how to Link Aadhar Card to Bank Account
3. Direct Cash Support to Farmers with Linked Bank Accounts:
Through Aadhar Bill, Aadhar Card can be used to give cash support to small farmers. The bank accounts of farmers will be directly linked to their Aadhar Card.
4. Minimizing Frauds – Faster KYC:
Aadhar Card will ensure that the benefits are reaching only to the authentic individual. Thus, preventing misdirection and fraud. Also the eKYC based on Aadhar will not only save time, but will also help in a fraud free process.
Read more about eKYC Using Aadhar – Click Here
5. More Importantly – A Digital Lending Architecture:
Aadhar will help in reviving the economy. According to Nandan Nilekani- An immediate consequence of the new Aadhaar Bill is the ability to create a digital lending architecture that would act as a strategic alternative to the traditional banking system, de-risk the country from a prolonged stasis, and democratise credit.
Jan Dhan-Aadhar-Mobile: The JAM Trinity
The JAM trinity (Jan Dhan, Aadhaar and Mobile) enables the creation of an India stack (digital interfaces for all aspects of finance like documentation, payments, consent for information, etc) for India’s banking system thus reducing banks’ the overall operational costs.
- The JAM will enable paperless, presence-less and cashless transactions. Through digital data sources like online payment activity, social media, taxes, bill payments, etc. the electronic consent architecture of the India Stack would enable borrowers to provide their own data to demonstrate their track record to get a loan. Thus promoting the investment in the economy and giving it the boost.
- Currently, the Government of India is spending a large amount on welfare expenditure but around 30% of the expenditure is lost due to inefficiencies and leakages. Aadhar Bill will help in plugging in these leakages by making all the transactions traceable.
These are some benefits which support the former chairman’s statement on Aadhar News, that Aadhar will help in Kick Starting the economy. Aadhar Bill along with the expected GST Bill will be a revolution in the Banking System of India and will be an aid many structural reforms that are planned by the Government of India for near future.
To read more on the benefits of the Aadhar Card to the Indian Economy and to How will it benefit every group of society CLICK HERE.
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