Aadhaar For Growth And Social Change

Published Date: 02 Nov 2017

Government of India has taken a bold step in pursuit of fundamental change how to keep track of their 1.2 billion citizens. The new identity system may have its own set of potential and unforeseen problems. The key ingredient for economic and social development of an economy rests on the fact that growth in any sphere should be inclusive. India will be the first country to implement a biometric-based unique ID system "AADHAAR", a brand name for UID (Unique Identification), for its residents on such a large scale, enabling government of India to target and deliver services effectively, achieve greater returns on social investments, and track money and resource flows across the country. This paper focuses on the need for a single national identity system in India and its perceived benefits in harnessing inclusive growth and social change. This paper covers the four dimensions of inclusion namely financial inclusion, social inclusion, infrastructural inclusion and legal & regulatory inclusion. The paper also discusses about international scenario of single national id projects undertaken in 13 countries including India across the globe to understand current status, adoption and usage for inclusive growth of single ID systems. Scenario in some countries cases like India, Nigeria, and Bangladesh suggest large returns to its use, with potential gains in inclusion, efficiency, and governance. In others, these identification systems are being used as identity document only. Such countries are not able to leverage the potential benefits of these projects. The other primary conclusion is that these identification systems should be considered as authenticate and accurate measures bridge the gap of trust – deficit between various government departments and other stakeholders such as banks, financial institutions, NGOs, security agencies for the smooth and successful implementation of UID project and this in turn would help in national integration, and societal inclusion thereby leading to a major social change.

Keywords: Identity System, AADHAAR, Unique identification, Economic and Social Development, Inclusive Growth. Financial Inclusion, Social Inclusion, Infrastructural Inclusion and Legal & Regulatory Inclusion, Social Change

Inclusive India: Project AADHAAR for Growth and Social Change

Introduction

Nandan Nilekani in a casual discussion with the then Finance Minister P. Chidambaram visualized of a colossal information architecture that would work round the clock to help all sections of society. He dreamt of hundreds of small nodes called national information utilities (NIU) as part of an information network that are overseeing the process. In his words these informational utilities would streamline huge databases related to land and people, the social and spatial aspects of society (Mehmood, 2011). The efficiency and efficacy of Nandan Nilekani’s project will be tested with the time, but if successful, this would be the largest biometric based identity distribution e – government project in the globe (Dass, 2011).

In a developing country like India (second most populous country after China) the millions of citizens are excluded from various welfare schemes initiated by state and central governments due to lack of proper state – acknowledged existence (http://www.albrightstonebridge.com/uid_project_12-20-2012/). This lack of identity document and identity system has contributed to a poverty cycle and societal exclusion that limits the access to education, banking and opportunities for personal economic growth. After so many efforts, we were not having any national identity system in place, thereby, implying that residents were not having any standard means to verify that they are who they claim to be. All the major social services, banking, railway or airways reservations and many more facilities are based on identities and no standard ID systems take all facilities out from the reach of real needy. As the implications of this are enormous, if not taken care timely, huge money will be lost, resources will be wastes and prospects of advancement may vanish (Zelazny, 2012).

Although government of India was in discussion with experts of various fields to design an efficient and transparent mechanism for the inclusion of the poorest of the poor to the mainstream of the government delivery system such as Public Distribution System (PDS), MANREGA etc. This dream came into realization with the advancement of Information and Communication Technology by the establishment of Unique Identification Authority of India (UIDAI). But the task is so gigantic and if the targeted citizens are to be benefitted, the leader or the in – charge of the project should be capable to understand and handle intricacies of the project. The Prime Minister of India, to implement highly ambitious project and to provide a true leadership, appointed Nandan Nilekani from Infosys as the chairman of the UIDAI with a rank of a Cabinet Minister.

This concept of Unique ID is not very new for India as the government undertook first step in this direction in 1993 by issuing photo identity cards with the help of Election Commission and then in 2003, the Indian Government approved the Multipurpose National Identity Card (MNIC) with the objective of inclusive growth (NIDAI, 42 Report, 2011). The concept of a Unique Identification (UID) scheme was first discussed in 2006 when the scheme – Unique ID for BPL families was approved by the Department of Information Technology, Ministry of Communications and Information Technology. The UIDAI is created under the aegis of Planning Commission with an objective to issue a UID to all residents across the country that is (a) robust enough to eliminate duplicate and fake identities, and (b) can be verified and authenticated in an easy, cost-effective way (UIDAI, 2010). It would serve as a base for effective and transparent delivery of welfare schemes and would act as an effective guard to monitor various programmes and services of public and private sectors.

The most ambitious national identification project called the AADHAAR (meaning foundation), the brand name of Unique Identification (UID) project aims to give 1.2 billion Indians a unique identification number that is linked to the person’s demographic and biometric information. This number would help them to identify themselves anywhere in the country using inexpensive devices linked to mobile phone network and allow them to access lots of benefits and services (Vathsangam, 2011). This process would help in reduction of transaction costs, elimination of duplicate identities and fraud and would improve the delivery of social welfare services. A study done by National Institute of Public Finance and Policy (NIPFP) reported the benefits of AADHAAR integration with seven welfare schemes and subsidies. It estimates that linking these programmes to AADHAAR will lead to a "saving" of Rs 1 lakh crore over 10 years and that after accounting for the costs of integration with AADHAAR the internal rate of return of the project will be over 50% (Khera, 2013). However, the real change that is expected from AADHAAR is to revolutionize the process of registering India’s entire population onto a single database.

Literature Review

AADHAAR is a very ambitious project of government of India and its framework is based on the government’s vision to have inclusive growth as an explicit goal that includes enhancing the capacity for growth, generation of employment, development of infrastructure, improved access to quality education, better healthcare, rural transformation, and sustained agricultural growth, inclusion and social security. In India and abroad some quality work have been done by researchers and academicians to understand the implementation, adoption and usage of single national IDs. To get an insight into the proposed area of research, the work done by researchers and scholars has been thoroughly studied and summarized as follows:

The concept of a Unique Identification (UID) scheme was conceived since 2006 by Planning Commission of India with the implementation of Unique ID for BPL families in by the Department of Information Technology, Ministry of Communications and Information Technology. In a discussion for the approval of scheme Unique IDs for BPL families, the Committee appreciated the need of a UID Authority to be created by an executive order under the aegis of the Planning Commission to ensure a unique identity for all residents of India (42nd Report of Standing Committee on Finance, 2011). This led to the formulation of UIDAI on 28th January, 2009, being under the aegis of Planning Commission. This report also suggested and observed that the implementation of unique identification numbers may involve certain issues, such as (a) security and confidentiality of information, imposition of obligation of disclosure of information so collected in certain cases, (b) impersonation by certain individuals at the time of enrolment for issue of unique identification numbers, (c) unauthorised access to the Central Identities Data Repository (CIDR), (d) manipulation of biometric information, (e) investigation of certain acts constituting offence, and (f) unauthorised disclosure of the information collected for the purpose of issue of unique identification numbers, which should be addressed by law and attract penalties.

Nelson et. al. (1984) examined the practicality of collecting Social Security Numbers (SSN) and Employer Identification Numbers (EIN) in the Area Frame for use in overlap checking in multiple frame surveys and response rates between survey years were compared in order to determine whether collection of SSN's has an adverse effect upon overall survey response rates. Findings of the match procedures and data comparisons indicated that SSN's are indeed a valuable tool for overlap checking, and that survey response rates were not adversely affected, whereas, with the time the refusal rates have tended to stay at the same 1evel or actually decreased.

In his working paper, Dass (2008) tried to put the UID of India into a perspective to evaluate the set of issues and concerns, as pointed by various stakeholders and try to understand the degree of criticality of those arguments. Financial and social inclusion is main suggested perceived benefits of this study. Dass categorized criticisms under four heads – a) violation of privacy and civil liberties of people; b) whether biometric technology – the cornerstone of the project – is capable of the gigantic task of de-duplication; c) lack of cost-benefit analysis or feasibility report for the project till now and d) the implied benefits of the project in the social sector, such as in the Public Distribution System (PDS), are largely illusive. In continuation of this work, Dass and Bajaj (2011) emphasized on the importance of single id system in India based upon their scoring model. Authors found that major challenges are enrolments, technology platform choice and strategic design, corresponding policy and legal frameworks unforeseen financial costs, increased security threats and unacceptable imposition on citizens. The paper also discusses about international scenario of single national id projects undertaken in 27 countries across the globe to understand current status, adoption and usage. To reinforce the need for national ID, the existing IDs were analysed based on a scoring model considering various dimensions. Authors also discussed the current status, adoption and usage of single id systems across the globe taking the example of 27 countries.

Khera (2013) discusses the cost-benefit analysis by the National Institute of Public Finance and Policy of the benefits from AADHAAR integration with seven schemes namely public distribution system (PDS), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, or simply NREGA), school education (including teacher salaries, mid-day meals, textbooks and uniforms), fertiliser subsidy, liquefied petroleum gas (LPG) subsidy, Indira Awaas Yojana (IAY), and payments in other schemes (pensions, Janani Suraksha Yojana, accredited social health activists and the Integrated Child Development Services). This report estimates that linking these programmes to AADHAAR will lead to a "saving" of Rs 1 lakh crore over 10 years and that after accounting for the costs of integration with AADHAAR the internal rate of return of the project will be over 50%. For example, for NREGA the report assumes that UID integration will lead to savings of 12% of total expenditure – 7% from "automation of muster rolls" and another 5% from linking NREGA bank accounts to AADHAAR. Khera however, reports that many of the findings of this report donot find any base and they are based upon some unrealistic assumptions.

Akuffo Tei (2012) investigated the how e-zwich, an innovation in electronic banking, has facilitated mobility and inclusion in the Ghanaian financial industry. This study, conducted on 100 respondents, revealed that although individuals have acquired the e-zwich card, only a few of those have actually used the card, the majority keeping it as a ‘decorative’ item. The research also found that most merchants do not own e-zwich Point of Sale (POS) devices and that the few who had them already had bank accounts with at least one of the banks in the country. The findings show that the unbanked who are the target for the inclusiveness feature of the e-zwich are not patronizing its usage. The findings of this report are also supported by Breckenridge (2010).

Gelb and Clark (2013) surveyed 160 cases where biometric identification has been used for economic, political, and social purposes in developing countries. According to their findings, about 50% of such ID implementation projects are supported by donors. This paper concludes that some of the cases included in the study suggested large returns to its users, with potential gains in inclusion, efficiency, and governance. In other cases, costly technology has been ineffective or, combined with the formalization of identity, has increased the risk of exclusion

Objectives

To study and examine the key dimensions of how India’s universal ID (UID) program, project AADHAAR, can be harnessed to drive inclusive growth and social change.

To study and compare the international scenario of single national id projects undertaken in various countries across the globe to understand current status, adoption and usage.

To study how the countries, where single id projects have been implemented, have leveraged the benefits of single ids for inclusive growth and social change.

Research Methodology

The study is based on secondary data. The research methodology adopted includes the following:

The exploratory research method in the sense of collecting data and analyzing relevant literature, information and empirical data.

Extensive desk research for analytical and comparative approach for the study.

Findings

Leveraging Benefits of AADHAAR for Inclusive Growth and Social Changes in India

The Shining India being on trajectory of growth has shifted her focus from promoting Incredible India to building Inclusive India. In the last decade there is seen a massive increase in spending on new and existing welfare programmes. To sustain social and economic growth and to reduce the social and economic disparities inclusive growth needs to be achieved. As per a news reported by The Hindu (2011), Communication and Technology Minister, Kapil Sibal said "The government sees UID as a critical initiative to achieve inclusive growth." Also according to a report by CFOCONNECT (2011), the UID will open doors for people to access most types of commercial services, creating enormous business opportunities on the one hand, and inclusion within the mainstream economy for millions, on the other. With the right governance and uptake, Accenture believes project AADHAAR will set the foundation for a significant change in social and economic inclusion in India, and drive a new wave of sustained growth and social progress throughout the nation. In line with this, the Planning Commission had made inclusive growth an explicit goal in the Twelfth Five Year Plan (2012 – 2017) that includes enhancing the capacity for growth, generation of employment, development of infrastructure, improved access to quality education, better healthcare, rural transformation, and sustained agricultural growth, inclusion and social security. Systematizing and implementing a globally acceptable and portable identification system that is approachable to the poor and those in the remote area is at the core of any inclusion program. Under these conditions only the country has requisite broad net it needs to achieve in the four inclusion areas namely financial, social, infrastructure and regulatory (fig. 1).

Figure 1: Four Critical Areas of Inclusion

Source: A Report by Accenture (2011) on "Inclusive India: How Project AADHAAR Can Drive Growth and Social Change"

Financial Inclusion

Universally, Financial Inclusion is one of the most discussed topics across many forums. Many countries have taken action to increase the access and use of financial services. Financial Inclusion imply setting up clear agenda for increasing both access to and use of financial services within the defined timeline. It could be achieved when products or services are designed according to requirement of residents from all sections of society and made available to them at reasonable cost (Abuja, 2012).

According to United Nation Report (2006), each developing country should have a continuum of financial institutions that, together, offer appropriate products and services (that includes savings, short and long-term credit, leasing and factoring, mortgages, insurance, pensions, payments, local money transfers and international remittances) to all segments of the population characterized by (a) access at a reasonable cost; (b) sound institutions headed by proper regulatory and legal framework, industry standards and monitoring systems; (c) financial and institutional sustainability (d) multiple providers of financial services.

The Finance Minister of India in the 2007-08 Union budget speech defined financial inclusion as ―the process of ensuring access to timely and adequate credit and financial services by vulnerable groups at an affordable cost‖ (Chidambaram, 2007).

For this paper, the definition of RBI is adopted which states that – a family is said to be financially included if at least one member of the family has a savings account with a bank (Natu et. al, 2008). Adopting this definition, we proceed towards linking of financial inclusion with AADHHAR, the brand name of UID.

The Unique Identification would provide easy access to day-to-day banking functions, and would allow banking systems to minimize the hassle of document verification or turning away those with surname as the only identification. AADHAAR has been recognized as a valid document under Know Your Customer (KYC) guidelines by RBI, IRDA and SEBI for opening bank accounts, insurance and securities markets respectively. Also, the Ministry of Finance has amended Prevention of Money Laundering Rules to recognize AADHAAR as an "officially valid" KYC document (UIDAI, 2012). This 12 – digit number coupled with online authentication services would help the financial sector in minimizing transaction cost and in the implementation of electronic payments platform. UIDAI has partnered with banks for opening of bank accounts during AADHAAR enrolment.

Some other key features of AADHAAR are as follows:

This UID may be used as a financial address that identifies an individual electronically and this helps in transferring funds directly into a beneficiaries linked account. This would help in minimizing fraud and corruption; and the real beneficiary would be benefitted.

For the verification of authenticity and to remove duplications, AADHAAR may be used as an authentication criterion by the financial sectors as per their business need. It can be done through any of the delivery channels e.g. branch, ATMs, Internet, mobile and microATMs.

It provides opportunities to financial sectors by providing standardized AADHHAAR enabled accounts (AEA), Payments Mechanism to Government Departments (APBS) and Devices and Standardized consumer experience (AEPS and Remittances).

These features of AADHAAR have benefits for all stakeholders. Some are summarized as follows:

As a customer, this unique identity system would help in reducing time delay, opportunity costs, access costs, and would enable them to withdraw their money from anywhere with the help of microATMs in their village. This would help the government in achieving its objective of financial inclusion and will help all the residents to be a part of mainstream and will give same platform to all of its residents.

From government’s point of view, this system of national identity would help in making the payments centrally directly to the beneficiary’s account, thereby leading to high liquidity and lower cost of funds. This would definitely ensure the timely and corruption free delivery as well as without the help of any middleman. APBS can become a single window facility with adequate security and access controls to facilitate electronic auditing. Governments need not to maintain every account of an individual and thus AADHAAR would help in minimizing administrative costs and operational difficulties.

AADHAAR can provide financial institutions many opportunities such as integrated authentication in the microATM devices enable Banks to rely on BCs to reach the unbanked population and micropayment solutions. This number would help in reducing cash management costs, customer acquisition cost, credit and operational risks in branchless operations model to name a few (UIDAI, 2012).

The goal of financial inclusion and one of the priorities of government cannot be achieved without the help of technology. The enrolment to AADHAAR will be a game changer in the entire process of financial inclusion plan (Gupta, 2011).

Social Inclusion

As per the report of Accenture, the second important parameter to include all sections of the society in the mainstream is Social Inclusion. To cover the weaker section of society and marginalized families, since last decade, the government of India has been spending hugely on multiple welfare programs; and helping them to be part of Indian growth and mainstream economy. UIDAI report on social inclusion suggests that "Inclusion of the vulnerable groups being the summum bonum and metaphorically speaking, the heart and soul of Aadhaar project, needs to be examined both from the point of its capacity and its limitation in effectively delivering to the marginalised, an enabler that would facilitate them to break the vicious circle of poverty and deprivation." Joshi (2011) cited the importance of UID programme by reporting that this programme will create 350,000 new jobs and USD 20 billion of economic output. It also reported, "a large section of funds earmarked for social sector projects "leak" out in the form of corruption and benefits trickling to the wrong population group. The UID programme will plug that gap." To provide maximum benefits to the real needy, UIDAI has three step inclusion strategy (fig. 2).

Government of India has implemented various welfare schemes and is spending a lot under these schemes. The welfare schemes basically fall under the three sections – a) Direct cash transfer, example being NAREGA, NSAP, Janani Suraksha Yojana etc., b) Subsidies for example LPG gas cylinder, subsidies on fertilizers, Targeted Public Distribution System (TPDS) and c) Services to individuals like Sarva Shiksha Abhiyan (SSA), etc.

In India a large section of the society depends on these welfare schemes and this section is not able to have the full benefits of these programmes because of leakage, corruption, delay and other inefficiencies.

Figure 2: UIDAI’s 3 step Inclusion Strategy

Source: Document Number: Social Inclusion and AADHAAR

How AADHAAR can be leveraged to benefit the society by enhancing the effectiveness of these programmes may be summarized as follows (UIDAI, 2010):

It is envisioned that AADHAAR enabled bank accounts will ease out the process of distribution of benefits of social welfare schemes like pension, student scholarships, MGNREGS wages, etc. UIDAI is working with central and state governments to assign AADHAAR enabled accounts for disbursal of all social security benefits. With the help of low cost interoperable microATM network (which have vats geographical reach), beneficiaries would be able to access their bank accounts (Gupta, 2011). Also the removal of duplicate and fake identities will help in utilizing scarce financial resources more effectively and efficiently.

In case pension benefits, it is required to check the existence of real beneficiary over regular intervals, as the benefits are to be stopped after the beneficiary death. Also, in case of direct cash transfer and subsidy welfare schemes, it is required that benefit goes to the real hands. Biometric based identity authentication can be leveraged to achieve this verification for all scenarios as it confirms the presence and existence of the person. Also the benefits of Student Scholarship Assistance benefits could be directly sent to student’s account without the fear of fraud.

AADHAAR based IDs may have noneconomic benefits as well. Implementation of UIDs will give the poor the same footing in the society as the others. In a diverse country like India, where people speak multiple languages, belong to different culture, caste and religion and have powerful state and local governments, UIDs can be part of the politics of recognition. Having a UID might underscore a "superordinate identity" (Indian) that, though not extinguishing other identities (Bihari, dalit, youth, female…), could improve intergroup relations (Putnam 2007; Akerlof & Kranton 2010; Klitgaard 2011).

Thus the right implementation of AADHAAR may help in leveraging the complete benefits of welfare schemes and can improve the speed of social inclusion of Aam Aadami by felicitating access to Eligible Benefit, Access to Full Benefits, and Access to Benefits when it is due.

Infrastructural Inclusion

Infrastructure refers to all the institutions that are required to maintain the economic, health, and cultural & social standards of a country. This includes financial services, the education system, the health care facilities, system of government, law enforcement services and emergency services. In order that less developed communities have access to core economic activities and services, a well developed communication and transport network is must (Mary, 2012).

Under Indira Aawas Yojana, the identified residents, in rural areas, below the poverty line are provided grants by the government for the construction and upgradation of houses. This construction assistance provided is Rs. 45,000 per unit in plain areas and Rs. 48,500 in hilly areas. Funds are disbursed through bank and post office accounts. It is highlighted many times that there is a corruption in this scheme. Many a time, funds are allotted to multiple members of the same family, the benefit is given twice or thrice to one beneficiary, houses are allotted to government officials, bribes have to be paid, and middlemen create inefficiencies. One reason may be the allocation of funds takes place through bank accounts and leakages are due to fake identities or existence of "ghosts", which AADHAAR can plug (NIPFP, 2012).

In India there are number of challenges in the health related areas. Because of lack of identity, the population remains unidentified and thus contributing to poor tracking of health conditions and thus inability to introduce a national health insurance scheme. It is not possible for government to keep track of infants to ensure vaccination. There is a dire need to have infrastructure in place that can track disease and mortality to ensure positive health outcomes and increasing life expectancy for India’s population. The current method of capturing data on disease conditions involves irregular national or state surveys. The health insurance program for the poor (called RSBY) already uses a biometric based smart card and adding UID-based authentication could provide useful information to India’s population on routine disease conditions and possible epidemics (Zelazny, 2012).

Thus UID programme will definitely ensure better infrastructure for inclusive growth.

Legislative and Regulatory Inclusion

From recent years the India is facing the challenges of corruption be it 2G Scam or Common Wealth Games Scam or Coal Scam to name a few. Because of these fraudulent scams, we are being highly criticized globally. Also it’s been a routine for Indian residents to hear about one fraud or the other in the form of large-scale leakages in the provision of fuel, food, and electricity, which are associated with fraudulent eligibility cards among other things. When corruption is wide spread, gamers will find one or the other way to fulfill their habits of bribery and fraud and these people may undermine any new system. National ID cards have the potential disadvantages of misuse, especially when combined with census data or data from the National Population Register, ranging from the disclosure of private information to hackers with identity theft in mind to governments who wish to use private information to oppress. When contemplating what might go wrong, one has to be prepared that the bad guys may be members of the UIDAI (Klitgaard, 2011). Without a better legal framework, which is a priority, such bad guys cannot be kept away from making advantage of loop holes of the system. There is a great need for a proper legal and regulatory framework in place to reduce the risk of leakages of fund, and frauds.

India has largest number of dropouts or nonschool attending students in the world. Inspite of this, the number of students attending schools, colleges or any other educational and training institutes is so huge that it has become a herculean task for the respective authorities to organize, manage and conduct various examinations and other academic activities. There have been reports of bogus candidates appearing in various entrance examinations in place of other candidates. AADHAAR could play a vital role in fair conduction and transparent evaluation process. Mass cheatings and institutionalized fraudulence can be checked and minimized.

The UID project, if implemented successfully, will serve as indicator on population levels and growth. Since UID promises increased vigilance and proper documentation, the governments will be able to keep track on illegal immigration, and thus will better be able to anticipate terrorist attacks and manage internal security (Zelazny, 2012). Also individual identity will always be at stake, since many hacking agencies like wiki – leaks may always try to peep into lives of others. There is, therefore, a great need to develop a strong and reliable legal and regulatory framework that would give residents a confidence that there security would not be breached and there should also be a mechanism for grievance handling. Only then the people of India will feel legally inclusive.

International Scenario: Current Status, Adoption and Usage.

After 9/11, when the twin towers of world trade centre turned into ground zero within few minutes, the world has been clearly divided into two parts – one who are shocked by havoc and others those who are in favour of such acts in the name of religion. Although the second segment is very small but now comes the dire need to identify, differentiate and locate such kind of people so as to manage and control their future endeavours. In this direction, governments have started to collect, store and manage citizen’s records with the help of technology.

While, the use of Biometric identifiers as national Ids have been successfully implemented by a number of countries including Argentina, Belgium, Colombia, Germany, Italy, Peru and Spain, but there have been serious brainstorming going on in nations such as Australia, Canada and UK in terms of viability and fear of misuse of such a quantum of data available centrally (Dass, 2011). These nations argue that the cyber terrorists/hackers or antisocial elements can take advantage of this data. This debate is everlasting. There are some pros and cons for a system to be implemented. In this section, paper discusses about international scenario of single national id projects undertaken in 10 countries across the globe to understand current status, adoption and their contribution for the inclusive growth of the society (Table 1).

Single national id systems have been widely used in variety of financial services as a measure of identification and authentication: opening bank accounts, claiming pensions and insurance, cheques verification, financial transactions and many more. Relatively simple fingerprint technology has been used for at least 20 years as a means of authentication for commercial transactions, sometimes substituting for other methods (PINs, signatures). Recently, more precise, digital biometric technology has paved the way for multi-purpose authentication, in some cases combined with mobile devises to create "biometric money"—secure cashless transactions (Gelb and Clark, 2013). One example for this could be Ghana’s E-Zwich technology marks an evolution towards the use of biometrics beyond authentication towards identification and e-Money. The E-Zwich has been very effective with regard to financial mobility and inclusion. This scheme was basically implemented with the objective of an effect to draw unbanked population into the banking economy and to draw state’s regulatory grasp deep into the informal and rural domains of the national economy (Akuffo Tei, 2012; Breckenridge, 2010) (Table 1).

Single national id systems have also been successful in establishing secure and authentic identities as only official document for many purposes. In this regard the Mykad of Malaysia and National Multipurpose ID card of Philippines are accepted as valid identification for all purposes like opening a bank account, for withdrawal and deposits etc (Table 1).

These systems not only have financial implications for the society but have social impacts as well. Technology can be very well utilized for the wide spread of government’s welfare schemes such as: resettlement and demobilization payments, drought and flood relief, pensions, disability and unemployment compensation, social and universal income grants and public works. In India, UID project has the provision of microATMs, in which an individual person can access his/her share of welfare scheme’s benefit (MANREGA, Student Scholarship Schemes) from remote area as well. This would also help banks in dev loping less infrastructure. In Pakistan, CNIC (civil registry, ID), issued by NADRA is used for the effective delivery of government welfare schemes as Life and Health Insurance, Hajj, Benazir Income support program, cash disbursement etc. This card also acts as Refugee Proof of Registration ID (refugee tracking) (Table 1).

These examples help in concluding that single national id numbers have the potential for inclusion in all spheres – financial, social, infrastructural and legal & regulatory inclusion. A news in The Hindu (2011) reports that sixty lakh school students in the State, from standards I to XII, will be issued a unique identity number as part of the Unique Identification Authority of India (UIDAI) initiative of the Central government. This will help in tracking of attendance and academic performance. This would also help in avoiding bogus admissions and fraud entries in various entrance examinations. This reduced fraud in the admission process and entrance examinations would result in greater convenience and empowerment of real beneficiaries. Many cases have shown the potential for inclusion in the area of access to financial services

Some countries show the potential for inclusion in the area of access to financial services including through the use of biometric ATMs (Bolivia, Nepal) and by providing identification acceptable for banking KYC requirements as in case of India. Some has shown the potential for political inclusion, as in Bangladesh, Nigerian and Pakistan expansion of its electoral roll to include large numbers of previously undocumented citizens. In case of Indonesia and Pakistan, these identity cards are being used with an intention to reduce terror attacks and to have a check on refugees (Table 1).

Conclusion

Every initiative taken by an individual or the country has to pass through the stages of verbal criticism, alienation and intellectual opposition. Government of India has taken a bold step in pursuit of fundamental change how to keep track of their 1.2 billion citizens. The new identity system may have its own set of potential and unforeseen problems, which act as fodder for the critics but merely based on this we should not neglect the unimaginable and unthinkable benefits provided by the project. A knife can be used to cut vegetables and with the same knife we can take life also. So it is up to us how we utilize the tool at hand for the improvement of efficiency and bringing transparency to the G2C (Government to citizen) initiatives. Once given the green signal from the top to move ahead then all stake holders should move in tandem and in sync with the policy alignment. With the full moral authority; financial backing of the government; and innovative leadership, UIDAI can achieve this mammoth task of providing a number to all Indians. The last person sitting in the row or the poorest of the poor with the help of this 12 digit number will come in the mainstream of social schemes. It is not that we cannot complete this project or it is unachievable but at the same time it is not a roshogulla . We have to work very hard, think out of box to generate new ideas to keep the cost of the project in control and the timeline in the vicinity. The main objective of the project is social and financial inclusion. We should bridge the gap of trust deficit between various government departments and other stakeholders such as banks, financial institutions, NGOs, security agencies for the smooth and successful implementation of UID project. As they say more than half of budgetary allocations of social benefit schemes goes in wrong hands, this UID can plug the leakages and provide huge benefits to the society at large and would recover its cost in a more inclusive manner. On the international fronts as well, governments are able to reap the results of single id systems in place. A number of countries have set good examples of learning. By sharing and framing key lessons and tradeoffs, countries can learn to strengthen identification systems, including through the application of technology.

Managerial Implication and Limitations

UID systems have their share of benefits and challenges. Thus, in order to understand the goals and objectives of these activities of great potentials, a holistic planning should be taken up. To bring more transparency to the systems government should come forward and give chances to private players come forward under PPP models (Dass, 2008) in delivery of welfare schemes ultimately ensuring inclusive growth. There should be proper measures to maintain the privacy and secrecy of huge data, so that people can confide in such systems and come forward with full motivation. The decision makers should also consider framing the right kind of policies, legal structures and organizational setup for a successful rollout of National ID in India. A ranking matrix may be created to come up with a composite score for all districts based on various dimensions (Dass, 2008).

This study has its limitations as it is based on secondary data only. Empirical researches are to be done to assess the real benefits of this scheme in India and abroad. Also for international scenario only 10 countries are considered. More extensive exploratory studies are to be done to measure more dimensions in this field. In order to make such initiates, as UID a successful venture, a formal framework needs to be developed for comparing various UID systems around the world.

References

"AADHAAR Enabled Service Delivery", retrieved from www.uidai.gov.in on 13/4/2013.

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