Why is Aadhaar an Important Document?

Among the problems with the aadhaar project, one is that a vast number of people who enrolled have not received the number via post or had their enrollment packet rejected and hence an aadhaar number was never generated in their name. In both cases the solution is simple. Visit the website http://portal.uidai.gov.in and enter details of enrollment and download e-aadhaar. In second case just enroll again.

Yet, a vast majority of people are unable to do these things probably because they threw away the acknowledgement and don't have the enrollment ID. Hence criticizing the project unnecessarily.

What does a common man need to know of the aadhaar project? Why is aadhaar an important document? I will try to answer these questions in a moment but let me give a brief on how this project came into being.

After Kargil war it was felt that citizens needed an identity document which they need to carry on their person to prove who they are. Such a document was necessary, it was felt from the security point of view. Hence a project called Multi-Purpose National Identity Card(MNIC) was conceived. Indeed a project to give identification to every Indian was the brain child of Atal ji's government. This project would have rolled out had the BJP come to power in 2004. But when congress took power they never bothered to continue any of the projects of the previous government. Someone in the Ministry of Information Technology came out with a proposal to Uniquely Identify BPL families. The project Unique Identification for BPL Families was to have collected biometrics of the poor people in a family and give them a unique number. This was meant to identify them and serve as a way of authenticating them so that the Public Distribution System(PDS) could rid itself of fake/duplicate ration cards and real beneficiaries could be identified.

This idea found resonance among ministers of UPA-I and they kept discussing the project for nearly three years from Feb,2006 to Jan,2009 when UIDAI was formed. All these years could have been used to merge the Unique Identification project into the MNIC project but the ministries involved engaged in turf wars. Everyone knew that it would be turn out to be something fundamental using technology and hence wanted to be in the drivers seat and take credits. MNIC turned into National Population Register (NPR) a project which was started in 1965 and never pursued seriously by the congress.

After congress won the elections in 2009, they appointed Nandan Nilekani as head of the Unique Identification Authority of India. This brought vigour into a project that could have met the same fate as other projects. UIDAI was created with a sort of start-up gusto and patriotic fervor. Nandan called himself a pro-Bono mercenary. Fresh after writing a book on imagining India he got his hands full, on an important assignment given to him by none other than the prime minister himself.

Several important decisions were taken early into the design of the scheme. Voluntary enrollment, national roll-out and universal coverage. Twelve digits. Fingerprinting all ten fingers, iris and face bio-metrics. Private agencies to do enrollment. Registrars to hire agencies. Enrollment kits.

They kept their heads down and kept working conducting studies,discussing design alternatives, documenting processes, testing and certifying hardware, proof of concept and preliminary cost benefit analysis and many more things which I would never know of.

Enrollments started on 30th September,2010. They stand currently at more than a billion(as on 13/01/2016) and aadhaar's generated for 950 million.

Several arguments have been made justifying the project. Lack of universal birth registration being one of them. Cost benefit analysis showed humongous benefits to the government and people too. The aborted DBTL scheme of the congress showed that DBT worked at scale. The Modi government has decided to continue enrolments and may restart DBTL(see post date). The Jan Dhan Scheme fits into the DBT project like a much needed spoke. Other pillars for successful launch of DBT will be ubiquitous telecom connectivity, high tele-density and penetration of 3G/4G and also the success of the NOFN project. Another enabler will be electricity in all the villages. I am sure the Modi government is working on all of these.

Now comes the answer to why aadhaar would be a very important document. It has all the properties of a good identity document. National Recognition. Mobility. Use on any mobile/handheld. Aadhaar will be a financial address of the masses. A killer application of aadhaar would be its use as a bridge in money transfers. Also useful as a means of e-KYC. In a short time wallet companies would be linking the wallets with aadhaar so that money could be transferred from one wallet to another(from different companies). There can be aadhaar based mobile banking too. Even an aadhaar based money transfer within the net banking facilities of banks cannot be discounted. Once these things stabilize it would be the time of mobile contact-less swipe at POS machines using the unified payment interface which would really be the ultimate in electronic cash transactions.

So to take part in all of the e-cash transactions you would need an aadhaar linked bank account which makes it necessary for you to have an aadhaar in the first place. All this needs time but the initial tremors are being felt and a shakeup is in the offing.