This will allow massive credit expansion in India, as being trackable means lending companies can more easily identify people. Same thing has happened in the Philippines over the last 10 years, easy credit has exploded.
Village loan sharks love to take this card as security for their cut-throat loans to the poor, because they know that its owner will try their level best to not jeopardize their access to this card: no card means the kids starve. Since the ration card is issued by the government, it is (well neigh) impossible for their clients to get a duplicate issued, as well.
This new thing will probably end up as one more piece of paper/plastic for the poor to spend their life redeeming from the shylocks.
The 'ration card' provides both, a way to check identity and a way to keep track of rations disbursed.
By separating out identity part and attaching it to your biometric data, at least theoretically, if someone holds your ID card hostage, you can go to the issuing authority, and get another one issued, because you can prove your identity without any form of paper.
There will be huge problems with implementing this, as any large system tends to have. But once the dust settles, it should make life much more convenient for the poor and everyone else.
(idk why you're being downvoted; you're correct)
Microcredit or Macrowelfare: The Myth of Grameen https://mises.org/daily/2375
Well that's not how it's being used.
For the middle class, that system is in place already. Heck credit growth is pretty aggressive already, if anything steps are being taken to reduce its growth.
So that's an overall goal which is being solved elsewhere and doesn't need A terribly designed system to control identity.
And you trust the govt with it?
Currently it's been made compulsory to own one of these to get gas, in one state.
This is after the charter stated that no service would be made such that it required per ownership of such a card.