Alappuzha, Kerala: Kerala's Aadhaar service centres have been hit with penalties running into crores of rupees by the Unique Identification Authority of India (UIDAI) over errors in Aadhaar applications.

Although nearly ₹13 crore in payments due to service centres has been withheld over the past four years, the penalty arrears remain unsettled.

As a result, service centres are still not receiving any payment for Aadhaar enrolment and mandatory updates.

Service centres are not permitted to charge citizens for Aadhaar enrolment or mandatory updates. Instead, UIDAI normally pays the service centres through the Kerala IT Mission. However, payments have been withheld since December 2022 over errors in Aadhaar applications.

The payments have not yet been restored as penalties remain outstanding. Initially, service centres were charged a ₹25 penalty when an Aadhaar application was rejected due to an error. As the number of errors increased, the penalty was abruptly raised to ₹1,000 per rejected application.

UIDAI pays service centres ₹50 for completing an Aadhaar application, creating a huge gap between the amount earned and the penalties imposed.

The growing disparity between service payments and penalties is also cited as a reason why the arrears have not been cleared. Although the Kerala government has raised the issue with the Centre, no favourable decision has been taken so far.

Akshaya centres worst hit

Aadhaar services in Kerala are provided through Akshaya centres, banks, post offices and selected Common Service Centre (CSC) outlets. Akshaya centres handle the largest share of Aadhaar-related services in the state and have therefore been particularly affected by the withholding of payments.

State Aadhaar implementation officials said the outstanding penalties are nearing settlement and expressed hope that payments to service centres would be restored soon.

‘Withheld payments must be returned’

Stephen John, state president of the Forum of Akshaya Centre Entrepreneurs (FACE), said service centres were struggling to continue operations without payments for mandatory Aadhaar updates.

“We cannot continue to survive without receiving payments for mandatory Aadhaar updates. We are struggling even to pay salaries to employees. It is not right to impose penalties on service centres for errors caused by UIDAI’s shortcomings. The entire amount of withheld payments should be returned,” he said.