Prime Minister Narendra Modi’s welfare programme is not new in India: Previous administrations have also subsidised food and gasoline, as well as provided housing, toilets, and paid jobs to the rural poor. Modi’s competitive advantage stems from technology.
The administration, then led by the Congress Party, had pioneered direct cash transfers to beneficiaries a year before the 2014 election that brought him to office, inspired by former Brazilian President Lula da Silva’s popular Bolsa Familia programme. Modi converted a modest $1 billion start into a $300 billion vote magnet, all with the help of 12-digit figures.
These numbers, as well as the ID cards that contain them, are referred to as “Aadhaar.” It’s a biometrics-based system that allows practically everyone in the world’s second-most populous country to authenticate their identity. Aadhaar, which means “foundation” in Hindi, supports over 450 million no-frills savings accounts and has increased the usage of mobile internet for financial transactions in even the most rural communities. Five years ago, Nobel Laureate economist Paul Romer praised Aadhaar as a global model.