The government's ambitious unique identification (UID) initiative is likely to suffer severe cut in its  budget in the coming financial year.

Official sources said the Planning Commission has recommended only Rs 1,400 crore plan expenditure for the UID Authority against the demand for Rs 3,500 crore for 2011-12. The finance ministry will take a final call on the fund allocation.

Sources in UID Authority said they are not aware of any slash in the budget. They hope that their activities would not be hampered as the government has assured of necessary financial support. "The government would provide all the money required for the implementation of the project," he said.

UPA finance managers are finding it difficult to manage resources for flagship social sector initiatives owing to fund constraints and growing demand from ministries headed by coalition partners.

An official said, planned expenditure for UID Authority has been axed to allocate funds for flagship programmes. "The Authority wanted Rs 3,500 crore primarily to set up the ID data repository," he added.

The official also argued that the proposed fund cut could be attributed to transfer of a bulk of the responsibility to the home ministry, which has been assigned to maintain the national population register. In the current financial year, the Authority was given Rs 1,900 crore to launch the project. Unique Identification Authority, headed by IT czar Nandan Nilekani, has been tasked to assign unique identification (Aadhaar) numbers to a billion plus population in a bid to check pilferage in government schemes.

A 12-digit exclusive number, Aadhaar, is being issued by the Authority to act as a unique identification for residents, linking to their demographic and biometric information.

The government is working out the plan to make UID compulsory for availing benefits under rural job guarantee scheme.

The finance ministry has recently recognised Aadhaar as an officially valid document for opening bank accounts.