The Benefits Of Aadhaar Far Outweigh Its Challenges

A universally accepted national ID isn’t an option; it’s a must-have for all countries and its residents. Aadhaar has been designed to make life convenient and safe for residents of India. It is built on the principle that these residents are honest, law-abiding and in search of fairness.

Enrolling a country the size of Singapore, every week, for six years in a row, is no mean feat, but Aadhaar has now on-boarded about 1.2 billion people. Experts from around the world have studied Aadhaar and believe that, for the most part, the system is very elegant and secure. However, we’ve tripped on the simpler, yet important areas around education and communication. It’s time for the government to step up and address these issues in order for India and its citizens to realise the huge benefits that Aadhaar could bring.

I’ve lived in a few countries and have been fortunate to visit several others. As a student in France in a unique hostel that had students from every country one could think of, and later in the United States, and as a tourist or business traveller in several others, I recall often going into meetings where people asked for a government-issued photo ID. In most cases, I had to use my passport and, later, my locally issued driver’s licence, and I yearningly looked at the locals who had their own carte d’identite. It was then that I realised the power of a national ID system, something even our so-called less advanced neighbours like Pakistan, Sri Lanka and Bangladesh had implemented long before India did. It almost seemed like nobody could fathom a country without a government-issued national ID!

Specifically, in the United States, the social security number (SSN) is the identity proof and is accepted extensively for everything from applying for a job to claiming unemployment benefits to opening a bank account and taking an insurance policy to securing a telecom connection and school admissions to obtaining a driver’s licence. For a long time, the SSN was the username on most online banking and brokerage services; it’s only in the last five years or so that users have been advised to create a username.

I moved back to India in 2003, and later was the founding chief executive officer of mChek, the first large-scale mobile payments company. While we had some successes, the need in the banking industry to first on-board customers before servicing them meant that everyone needed to go through an expensive KYC (know your customer) process. This made customer on-boarding so expensive that business was simply unviable. As a result, mChek and all the other companies in that generation — NGPay, Obopay and others — ended up being a victim of being on the bleeding edge of mobile payments.

Towards the end of that generation of companies, the government announced the unique identity (UID) programme and I promptly put my hand up to help. I had, after all, seen the problems of not having a universal government ID. Or so I thought.

When I dug deeper, the cost of not having a universal ID was a shock to me:

• As a taxpayer, it was painful to see the leakages in government programmes; often as much as half the intended money was not reaching the beneficiary.

• As a consumer, it hurt to see the bloat in expenses that service providers needed to incur, which are eventually passed on to the customer.

• As someone passionate about inclusion, it was sad to see so many people simply unable to avail services that we all consider basic, like having a phone connection or a bank account.

However, the problems ran far deeper than anyone could envision.

• Banks were simply unable to on-board customers — even many with IDs. They did not find it feasible to spend Rs 500-1,000 to on-board someone who earns Rs 10,000 a month and barely has enough to make ends meet. It was just not worth the trouble.

• The cost of on-boarding a customer for mutual funds is Rs 1,500. At a 0.5 per cent commission, one needs to invest Rs 3 lakh to merely recover the customer on-boarding costs, something that only four million households in our country can afford.

• Employers came by and said they couldn’t do background checks on employees. One large retailer said they caught and fired an employee for shoplifting. Three months later, the same company caught him again. He had merely changed his last and first name, and their system didn’t recognise that it was the same person.

The list of inefficiencies that could be traced back to the lack of an easily verifiable, fake-proof ID is endless.

While government inefficiencies were obvious and have hitherto been a strain on the tax-payer, and, in effect, impact the beneficiary the most, the scariest learning came when I spent some time digging into the telecom industry and its processes.

At the time, India had about 500 million connections and the telcos were adding about 12 million users a month (net), which meant about 50 million gross (with a 3 per cent per month churn). Assuming five sheets of paper per account opening, it was costing the country 1,000 trees per day (a million trees in three years), not to mention an expensive and inefficient process that wasn’t even accurate. Retail agents were sometimes using one customer’s ID to open accounts for others who did not have an ID. So not only was the existing system inefficient and inaccurate, it was also unclear as to how much of it was littered with fraud, in which an unsuspecting genuine person may have got into trouble.

One often thinks about such programmes as being a way to catch the bad guys, but the reality is that life without a universal ID is also very inconvenient for the good guys.

But what should a universal ID really do? Don’t I already have a driver’s licence or a voter ID card or a ration card? Why do I need another ID? These are common questions people ask.

Designing a national ID programme needed several things to be incorporated, but the most important and pretty much the only guiding criterion was: “Is this good for the resident?” An ID system should only be centred on the resident, and the role of the government is to offer a national ID programme that makes the resident the sole beneficiary. There is only one basic assumption being made about the resident — the intent of being honest, law-abiding and fair.

So what are the requirements of such a system?

One person One ID: The recent revelation of 1.2 lakh ghost teachers scamming salaries in government schools is just one of many examples of where government beneficiaries were literally robbed of their rights. Leakages mean that the benefit isn’t reaching the intended beneficiary, whether in cash or in kind.

It’s about you, not about the “token” or “ID card”: Think about losing all your documents and other worldly possessions in a flood or an earthquake. In all that trauma, wouldn’t it be great to be able to reconstruct one’s life quickly? Just because you lost your card, doesn’t mean you lose your identity.

It should be possible to prove your identity to any and all if required: If a condition to you getting something requires you to prove your identity, and you are willing to do so, you should be able to do so.

Zero discrimination or possibility of discrimination on the basis of ID: Imagine relocating from Kerala to Manipur or any other part of the country. At least there should be zero discrimination on the basis of your ID.

It should be universally recognised and accepted: Having to carry multiple forms of IDs for different purposes doesn’t help anyone.

Enter Aadhaar, a unique and universal identifier for all Indian residents. Given that it was designed in 2010, we had the luxury of rethinking an ID from the principles mentioned above and with no baggage.

It would have been easy to just copy something that apparently worked in other countries, but given the unique requirements of India, and some of the recent benefits in technology (notably connectivity, mobile internet and the adoption of biometrics), we had the luxury of designing something around India.

Aadhaar is designed with several of the state-of-the-art advances in technology, and yet open enough to be enhanced with new developments. It is designed around having minimal information about users and protecting the end user, so that no information is shared without any consent and authentication of the end-user. Experts from across the world, including technocrats like Bill Gates, Sundar Pichai, Satya Nadella, as well as the best of technologists involved in designing identity and authentication platforms, have unanimously given it two thumbs up.

Why, then, do we have so much debate in India around Aadhaar? While the government has been very insistent about adopting it in a very aggressive manner, it’s clear that there are various camps of people, including people who have a strong objection to the programme. Why do relatively well-informed people object so strongly to the programme?

I have spent a lot of time thinking about and discussing the concerns of people. After hundreds of conversations, it is my conclusion that all concerns boil down to a few core issues — education and communication. Some areas where this could be done better are:

•Aadhaar linking: A lot of concern has risen around linking Aadhaar to bank account, PAN, phone number etc, which people believe will facilitate cross-linking. It’s a concern that needs to be addressed. The recently introduced tokenisation should address this concern, as the Aadhaar number will no longer be commonly available across agencies for cross-linkage.

•Data security of agencies that have access to Aadhaar data: Nobody has access to biometric data — whether during enrolment or during authentication. This data is only visible to the UIDAI and hence, users need not worry. With respect to the demographic data, the five basic fields of name, address, date of birth, gender and photograph are all basic fields that users would anyway share, and information security needs to be assured by each service provider, whether the data is obtained from UIDAI or otherwise.

•Other agencies making Aadhaar mandatory: It is important also to ensure that agencies/companies be careful about mandating Aadhaar and Aadhaar authentication. For several use cases like healthcare, schooling, feeding children, repairing gas leaks etc, agencies should use some common sense in ensuring that the primary goal of serving the consumer is not sacrificed because of a mandatory requirement of Aadhaar.

•Illusion of exclusion: A lot of people are crying hoarse about how Aadhaar is being used to exclude people from getting their benefits. While there are always going to be exceptions, agencies should once again try and resort to backup mechanisms like OTP-based authentication, to ensure service delivery to the common man.

•Correct use of Aadhaar: The government should educate and freely promote the correct use of Aadhaar — the fact that it provides an application program interface (API), allows third party service providers to immediately authenticate/KYC a user. We should stop the process of taking a photograph or photocopy, and only allow a digital version to be verified. This also requires opening up the Aadhaar APIs for all.

No system is perfect, but the acceptance of Aadhaar, coupled with constructive working together can indeed ensure that life for the next couple of generations will improve significantly. There might be operational bugs today, but these, in my opinion, are teething problems that should go away soon.

It’s time for the country to rally behind the programme and make it a success. The benefits far outweigh the challenges.

It’s our responsibility as residents of India to eliminate the leakages and wastage in our systems and that means setting aside our differences and working constructively towards adopting Aadhaar. Let’s hope 2018 is a year for acceptance and for the country to realise the massive benefits of such a system.