One of the claims made by UIDAI and GoI is that Aadhar has empowered people who did not have an ID by providing them one. However, these claims are bogus since Aadhaar ID has been allocated based on existing IDs themselves. To get Aadhaar, one has to submit Proof of identity and Proof of address.

In fact, 99.97% of those who have Aadhaar, used existing identity cards and proof of address to get it. 

In response to a Right to Information application in 2015, UIDAI replied that only 0.03% of those who had got the Aadhaar number got it without showing proof of identity and address. The rest had showed two existing proofs of identity and address.

One of the most appealing claims of the UIDAI project initially was to enable inclusion of the millions of Indians into various government programmes from which they are wrongly excluded. However, the UIDAI did not provide any data on how many Indian residents are without ID documents. There is no reliable estimate of this even today.

In a small survey of 2200 rural households in ten states in 2013, development economists Reetika Khera and Jean Dreze asked about possession of different identity cards (such as a voter ID, ration card, NREGA job card, etc.). They found between 85-95% of respondent households already had one of these IDs. Just over 80% had either a bank or post office passbook. (At that time, only around 15% had Aadhaar numbers.)

UIDAI’S reasoning that the lack of an identity document is the root cause of social exclusion is not backed by any evidence and is based on a flawed understanding of welfare programs.

Ram Lal, a ration card holder in Dhamtari, Chhattisgarh takes his ration of 35 kilo rice home.

Possession of any ID, including an Aadhaar now, does not guarantee inclusion into any welfare program.
In fact, every welfare program has its particular eligibility criteria. For example, as per central government norms, to get national old age pension of Rs 200 a month from the central government, the elderly are required to produce proof of age of being over 60 years of age, and of belonging to a household living below the poverty line. A widow is required to show a death certificate of her husband. A widow who, say, has an Aadhaar number, but does not have her husband’s death certificate will continue to be excluded from widow pension even now.
Further, even among those who did have these documents, a major source of exclusion – perhaps more than the lack of ID documents – is that the size of social welfare programmes is capped by the government. Even if a person meets the eligibility criteria and subits all the necessary ID documents, they are put on a “waiting list” instead of being included because the government may have already exhausted its target coverage or quota for that particular scheme.
The Centre's contribution per pensioner has remained a meagre Rs 200/month since 2006. For widows and disabled, this has stagnated at Rs 300. In principle, the National Social Assistance Programme or social pension is meant to cover all eligible persons in the below poverty line population, but the freezing of the central allotment has meant that even those eligible cannot get pensions. In the financial year 2015-16, social pensions benefits went to 2.3 crore individuals while the elderly in India constitute about 10 crore, making the coverage only about 25% of what it should be.

The cure, then, is to expand these schemes. What the government is doing instead is to additionally make it mandatory for them to enroll into a biometrics-based identity program to get the welfare benefits they are already eligible for.

Kunti and Surajman receive monthly pensions of Rs 300 each in Sarguja, Chhattisgarh under National Social Assistance Programme. Central government has frozen pension coverage at 25% of what it should be, and not increased its contribution of Rs 200/monthly since 2006.

This is how the Aadhaar-based system works in welfare: To get Aadhaar, a 12-digit number, residents are required to submit biometrics and demographic information to private enrolling agencies hired by the state governments. Biometrics include the scan of all fingerprints, face, and the iris of both eyes. The demographic information includes name, date of birth, gender, residential address.
The information is then sent to the Unique Identity Authority of India's Central Information Data Repository where it is compared against every other person who has previously enrolled. This is called "de-duplication".
When the government requires Aadhaar number in a particular program, the information a resident has provided to the Programme Department (for example, rural development department in case of pensions, or food department in case of rations) along with Aadhaar number is “seeded” or matched with the information that person has provided to UIDAI. After this, every time a resident accesses the welfare program, they are authenticated based on data stored against their Aadhaar number. Under the public distribution system or rations, for instance, a ration beneficiary must place a finger on a “point of sale” machine, which uses the internet to match the individual’s fingerprints against data stored on the centralised Aadhaar database. Once the beneficiary’s identity is confirmed, the ration shop owner hands over the rations at the prescribed rate.

This system requires multiple fragile technologies to work at the same time: the point of sale machine, the biometrics, the Internet connection, remote servers, and often other elements such as the local mobile network. Further, it requires at least some household members to have an Aadhaar number, correctly seeded in the PDS database.

In rural India, especially in the poorest States, even in State capitals, network failures and other glitches routinely disable this sort of technology. Note that Internet dependence is inherent to Aadhaar since there is no question of downloading the biometrics.
In villages with poor connectivity, the Aadhaar-based system is beginning to exclude thousands of users. Biometrics have consistently failed for people who depend on manual labour for a living as their fingerprints get omitted. In Rajasthan, thousands of elderly were wrongly declared “dead”, and their pension stopped because one or many of these technologies did not work well. Many of them are still trying to get the administration to recognise them as “living”. Thousands others were wrongly excluded and denied rations in the middle of a drought earlier this year. Imposing a technology that does not work on people who depend on it for their survival is a grave injustice.

Hanja Devi, a ration card holder in Daulatpura in Ajmer, Rajasthan had made three trips that month to the ration shop in an effort to get her fingrprints authenticated in Aadhaar. Her fingerprints mismatch repeatedly.

Is Aadhaar is necessary to do Direct Benefit Transfers – subsidies given directly to people through their bank accounts -- and will lack of Aadhaar mean lakhs of beneficiaries who are already on it will face severe problems, with their wages, pensions payments adversely affected?

On October 15, 2015, during the Supreme Court on Aadhaar, the government claimed that Aadhaar is used to provide wages to 1 crore workers under the national rural employment guarantee scheme and to reach 30 lakh pensioners.

Disrupting this system now by limiting it to voluntary use, the government claimed, will disrupt payments to a large section of the population. It requested the court to instead permit it to make Aadhaar mandatory in 80 social schemes.

But Direct Benefit Transfers – subsidies given directly to people through their bank accounts – was at that time mostly being carried out through the National Electronic Funds Transfer(NEFT), not through Aadhaar. Even now, Direct Benefit Transfer do not need Aadhaar, they can be done through NEFT very successfully.

In March 2015, 98.3% of MNREGA workers received wages through simple NEFT bank transfers. Only 1.6% of wages were paid through the Aadhaar Payment Bridge System, and 0.1% through another system, called the Public Financial Management System, which again doesn’t require Aadhaar.

For social pensions, the government had made 92.6% of Direct Benefits Transfers through NEFT, and only 5.2% through the Aadhaar Payment Bridge System and it can continue to pay pensions directly into bank accounts without Aadhaar.

(charts here and here)

Many people are being deprived of their food rations because they have no Aadhaar number; or because their Aadhaar number has not been correctly "seeded"; or because their biometrics do not work, or simply because the "point of sale" machine returns various error messages.

Even those for whom the system works face huge inconvenience. Often they have to make repeated trips to the ration shop, or send different members in turn, until the machine cooperates. Sometimes schoolchildren are asked to skip classes and try their luck at the ration shop. This unreliable system causes a colossal waste of time for everyone.
Despite this, the Central government continues to push for compulsory Aadhaar-based biometric authentication in ration system in violation of Supreme Court orders. The court did allow the use of Aadhaar in the public distribution, but not making it compulsory for users. Nor can the government invoke the Aadhaar Act to justify this move: the relevant sections of the Act are yet to be notified.

Anada Singh, in Daulatpura, Ajmer, whose Aadhaar authentication does not work reliably.

It is not clear to what extent as government does not publish disaggregated data on this even in case of ration system. In several instances, the new system has created more confusion and corruption. Since December 2015, the Government of Rajasthan has tried hard to enforce the system. The use of “point of sale” machines is compulsory and every ration shop has one. Yet, according to official data compiled by the Mazdoor Kisan Shakti Sangathan, only 61 per cent of Rajasthan’s foodgrain allocation found its way through the point of sale system in July 2016, with a similar figure (63 per cent) for August.
The rest is either siphoned off or delivered using the old “register” system — which of the two is hard to say since utter confusion prevails about the permissibility of using registers as a fallback option.

In Jharkhand, after the Aadhaar-based point of sale system was made compulsory, in July 2016, ration cardholders in Ranchi district received less than half of their foodgrain entitlements through that system, according to the state website. The situation was much the same in August.

A “dual system”, where food grains go partly through the point of sale system and partly through the fallback register system, is the worst. Because only dealers know whether and when the manual register system is permissible, and they have no incentive to share that information with the cardholders. 

Further, continuing with the ration example, the Aadhaar system fails to check “quantity fraud”: ration dealers often give people less than what they are entitled to, and pocket the rest. Point of sale machines are ineffective in preventing this. 

Yet, Aadhaar is proceeding like a juggernaut, without paying serious attention to the collateral damage to welfare systems. Instead, the Central government peddles bogus figures of Aadhaar-enabled financial savings to justify further imposition of Aadhaar technology.

via. Research and Action