A unique identity number or aadhaar for every person in the country is expected to yield enormous efficiencies for banks and government departments. A recent McKinsey report suggests potential five-yearly savings of 1.4 lakh crore for the government. The report contends that people benefit to an extent of 14 lakh crore in a five year period from the government and a conservative estimate of ten percent savings is made here. Central to the project is the twelve digit Aadhaar and surrouding it will be a plethora of applications some of which are listed below.
- There are clearly, immense benefits from a mechanism that uniquely identifies a person, and ensures instant identity verification. The need to prove identity only once will bring down transaction costs for the poor[1].
- A clear identity number would also transform the delivery of social welfare programs by making them more inclusive of communities now cut off from such benefits due to their lack of identification[1].
- It would enable the government to shift from indirect to direct benefits, and help verify whether the intended beneficiaries actually receive funds/subsidies. Among the merits and rationale of this project the most compelling one is the accountability in distribution of benefits whether it is discounts on grains, school fees for children under Sarva Shiksha Abhiyan(SSA), pension payments for the elderly or Conditional Cash Deposits(CCD) such as the Janani Suraksha Yojana(JSY).
- A single, universal identity number will also be transformational in eliminating fraud and duplicate identities, since individuals will no longer be able to represent themselves differently to different agencies. This will result in significant savings to the state exchequer[1].
- Several banks are trying to issue a customer ID so that they can track their customers interaction with the bank. Until now a customer can choose to apply for a new ID in case he wants to hide the fact that he has made transactions with the bank earlier. AADHAAR will clean up the customer databases of the banks and help in their marketing pitch. It is also going to benefit the credit information bureaus which can track a person’s credit history[2].
- When Aadhaar is linked with PDS and authenticated sale of grains is made, the fair price shop(FPS) during the replenishment cycle will be allocated an amount of grains equal to the actual sale made and not the planned amount of sales in the next cycle. The government is guaranteed to save at least a few tens of thousands of crores in PDS alone[1].
- A student tracking programme would help admit street children and destitute children into schools. Continuous assessment through UID linked score card would benefit children when they migrate from one school to another. A truly cumulative report of a students performance can be hosted at a suitable government portal[3]. There are reports of a system where fingerprints are to be logged for attendance of teachers in schools. This is not a new phenomenon as most colleges have implemented biometric scanners to log attendance.
- Issue of Aadhaar numbers is expected to precede rollout of a host of E-governance initiatives such as linking land holdings, PDS benefits and LPG and petroleum subsidy with Aadhaar and a nationwide rollout of a network of MicroATMs to perform cashless payments and banking services(Funds transfer, Micro credit, Micro pension, Micro insurance). The MicroATM network, estimated to be at least two such devices per village for six lakh villages, would mean 1.2 million branchless banking points. Add to this a few tens of millions of Point of Sale terminals at kirana stores and other establishments to service the purchase requests through cards issued by banks[2].
- In an increasingly cashless economy Aadhaar linked bank accounts could be used to promote cashless payment transactions thus aiding the capability of the government in monitoring money flows and resources[2].
- It was reported last year that Apollo Hospitals had written to the UIDAI and to the Knowledge Commission to link UID numbers with health profiles of individuals and offered to manage the health records (Business Standard, 27 August 2009)[4]. It has already embarked on a project “Health Superhighway” that reportedly connects doctors, hospitals and pharmacies, who would be able to communicate with each other and access health records. With Aadhaar efficacy of medicines can be monitored real time whereas presently after human trials medicines qualify to be administered and there is no way a case by case report card could have been prepared. Medicines, once dispensed, such a note can be made in the person’s medical records and should be open for audits by other doctors. This might lead to evangelism in doctor profession where the brand of medicine prescribed will be openly known to the system and the doctor can be held accountable for any bias towards higher priced medicines. The government and health insurance companies can tie up to finance the cost of consultations and medical expenses. Government doctors could be paid through a system where they are expected to attend to a minimum number of patients.
Controversies are not new to the country and some of them have been successfully quelled by UIDAI.
- When the controversy over whether UID is designed only for citizens of INDIA and is intended to throw out illegal immigrants arose Mr Nilekani categorically stated that UID is for identification and not as proof of citizenship, the first hurdle was crossed.
- When the problem of enrolling infants without biometric details arose UIDAI chose to link the parents biometric details with a sort of shell UID with biometric details to be posted at a later date when the child is 5 years old or later.
- When people whose fingerprints have worn out have to be enrolled and authenticated the use of demographic details to authenticate would have left a gaping hole in the security system of the AADHAAR authentication, Mr Nilekani and team chose to authenticate such people through passwords.
- When people concerned about privacy raised doubts about the security of the database UIDAI dispelled all doubts by making it clear that demographic or biometric data will not be shared with anyone and authentication requests will be served with a ‘Yes’ or ‘No’ response only.
Criticism not yet addressed
There have been concerns from civil rights activists about surveillance that the government can potentially impose on the residents. Recently the home minister announced a project called NATGRID under which twenty one databases with the government such as ration card holders, Voter ID card holders, PAN card holders, provident fund accounts, Driver’s license holders etc will all be linked with each other with the help of the Aadhaar number. The reason this is done is to detect patterns, trace sources for monies and support, track travellers, and identify those who must be watched, investigated, disabled and neutralised. It is obvious that criminals and undertrials would also be enrolled under the scheme. Someone even suggested that a DNA bank of criminals will be created. The police under pressure to solve cases might impose needless authentication on the civilians. Anyone with Aadhaar would be a suspect which would be a serious breach of privacy.
Another serious issue which is yet to be resolved is the potential of internal sabotage or misuse and external breakin of the CIDR. The under discussion bill seeks to impose hefty fine on anyone who is caught with such a ploy. The fine is mentioned as upto one crore whereas the value of data in the CIDR would easily exceed a few hundred crores. With inflation eroding the value of the rupee one crore a few years from now would be next to nothing. Mentioning a maximum quantum of fine in the bill would invite periodic amendments, which have never occurred, for which we have evidence in other outdated criminal laws. Instead a fine amount should be decided by the courts on a case by case basis.
References:
[1] UIDAI Strategy Overview Document
[2] UIDAI Micropayments
[3] UID and Education
[4] Apollo begins project to connect health players
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