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Aadhaar For Growth And Social Change Information Technology Essay

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.
Aadhar Card, being the brand identity of the card issued by the Unique Identification Authority of India, under the chairmanship of Nandan Nilekani, the co-founder of Infosys was developed as a solution to tackle the legal issues caused by the increasing number of illegal migrants from neighboring countries. The fundamentals of UID are highly co-related to the Social Security number issued by the United States Department of Social Security Administration.[1] The significant point of difference between the two being the UID was a mandate[2] while the latter was at the discretion of the citizens.

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.
In March 2011, Rajanish Dass of IIM Ahmedabad's Computer and Information Systems Group, published a paper titled "Unique Identity Project in India: A divine dream or a miscalculated heroism". Dass claimed that even if enrollment is voluntary, it is being made mandatory by indirect means. He pointed out that essential schemes like the National Food Security Act, 2013 was being linked to UIDAI. He also pointed the feasibility of a project of this size had not been studied and raised concerns about the quality of the biometric data being collected. He cited another researcher Usha Ramanathan that UIDAI will ultimately have to become profit-making to sustain itself.

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.
In late September 2013, following the Supreme Court verdict, Union Minister of State for Parliamentary Affairs and Planning Rajeev Shukla said that the National Identification Authority of India Bill, 2010 would be attempted to be passed in the winter session of the Parliament. On 9 October 2013, the National Payments Corporation of India launched an Aadhaar-based remittance system. Using the system funds could be transferred to any Aadhaar-linked bank accounts, if only the Aadhaar number was known. It was announced that an SMS could be used for amounts up to ₹5,000 (US$74) and for amounts over that a mobile bank app could be used. By this time around 44 million Aadhaar numbers had been issued.

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.
The basic objective behind implementation of an Unique Identification Number for Indian citizens was no doubt a welfare scheme of the Government. But it remains still a fallacy as to how far the Government and the agency could ensure data security as well as protection. The basic purpose of the scheme stands defeated if the collected data are provided to other agencies for various purposes including criminal investigation. The order of the Hon’ble Supreme Court reversing the order of the Bombay High Court to provide for database for criminal investigation stands as a positive move. The SC has also prohibited the agency from transferring the information collected from the citizens to any other agencies. The absence of a strong legislative framework to deal with Unique Identification scheme stands as a major hindrance for the success of the scheme.

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.
An efficient encryption policy also plays a vital role in ensuring national security. Presently, India does not have a parallel system, but it is no doubt prudent to frame one. Though the government is conscious of the connection between encryption and national security, it seems to be addressing it by setting a low standard for the public which enables it to monitor communications and other information so easily. It is significant to note that today we live in a digital age or cyberspace where there are no boundaries. One cannot encrypt data at 40 bits in India and think it is safe, because that encryption can be broken everywhere else in the world. Despite the fact that there are no boundaries in the digital age, users of the internet and communication technologies are subject to different and potentially inconsistent regulatory and self-regulatory data security frameworks and consequently different encryption standards. As stated before, Aadhar database contains many significant biometric as well as personal information. Hence, while dealing with such sensitive information about the citizens, the Government could have ensured a strong legislative protective shield.

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


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.

Recently the susceptibility of governmental databases to cybercrimes has been well documented and exposed all over the world. The absence of any legal safeguards for lapses on the part of the Registrars, authorities and enrolling agencies, further makes the entire situation far more problematic for an individual’s privacy. Still it is wretched to observe that Indian government does not have a specific Law on data protection. Indian Government owes a reasonable duty of care to the citizens to ensure the protection of their data from misuse. In the absence of such reasonable care which is expected from a governmental authority, the realization of projects like Aadhar should be given a second thought.

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 Information Technology Act 2000 defines the term data as “a representation of information, knowledge, facts, concepts or instructions which are being prepared or have been prepared in a formalised manner, and is intended to be processed, is being processed or has been processed in a computer system or computer network, and may be in any form (including computer printouts magnetic or optical storage media, punched cards, punched tapes) or stored in the memory of the computer”.[6]Even though the concept of data was defined, the definition of “data” would be more relevant in the field of cybercrime rather than in the field of data protection.[7] Introducing a UID scheme like Aadhaar in the pretext of vagueness in existing law should not be warranted.

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).
The security standard requires that technical organisational measures should be taken by the data controller that are appropriate to the risks presented by the processing. Any person acting under the authority of the data controller, including a processor, must not process data except on instructions from the controller. As far as government of India is concerned no proper measures are taken to secure the privacy of Aadhar. In the absence of such technical protection the implementation such an elaborate data scheme revealing personal data cannot be entertained.

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 (

One way to overcome this problem could be to set in fact a global standard for encryption that would be maximal for the prevention of data leaks. For instance, there are existing algorithms that are royalty free and available to the global public such as the Advanced Encryption Standard algorithm, which is available worldwide. The public disclosure and analysis of the algorithm bolsters the likelihood that it is genuinely secure, and its widespread use will lead to the expedited discovery of vulnerabilities and accelerated efforts to resolve potential weaknesses. Another concern that standardized encryption levels would resolve is the problem of differing export standards and export controls. As seen by the example of the US, industrialized nations often restrict the export of encryption algorithms that are of such strength that they are considered “dual use” - in other words, algorithms that are strong enough to be used for military as well as commercial purposes. Some countries require that the keys be shared, while others take a hands-off approach. In India joining a global standard or creating a national standard of maximum strength would work to address the current issue of inconsistencies among the required encryption levels.

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.
The transparency principle requires that individuals should be provided with the information as to the purpose of the processing and the identity of the data controller in the third country, and other information insofar as this is necessary to ensure fairness. As far as Aadhaar is concerned there is no information as to the purpose for which information is used and the persons by whom information are used.

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.
Aadhaar program was launched in 2009 with a main objective to give universal identity to every resident Indian. However in the initial stages of enrolment people faced lot of difficulties such as technical snags, incorrect data displayed etc. and also the importance of Aadhaar card was unclear. But many of the issues were resolved and people can now get the card with much ease as its acceptance as a mandatory document for various initiatives has been officially made. In addition to this it will help in reducing the corruption since every individual carries only one unique number.

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.

No doubt, data protection requirements are essential part of civil liberties protection in cyberspace thereby privacy and data protection assuming an integral part of human rights India lacks efficiency. It is the high time to formulate a strong legal framework for data security, protection and privacy protection.

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.
Data Protection refers to the set of privacy laws, policies and events that aim to minimize intrusion into one’s privacy caused by the collection, storage and dissemination of personal data. Personal data generally refers to the information or data which relate to a person who can be identified from that information or data whether collected by any Government or any private organization or an agency.[5] Taking note of the Indian scenario, it is evident that India does not have dedicated data protection Laws. This makes the sensitive information and personal details of Indian Citizens “Highly Vulnerable” to misuse.

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.
Lifting its earlier restriction, the Supreme today permitted voluntary use of Aadhaar cards in welfare schemes that also included MGNREGA, all pension schemes.

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).

In an August 2009 interview with the Tehelka, former chief of the Intelligence Bureau (IB), Ajit Doval, said that it was originally intended to flush out illegal immigrants, but social security benefits were later added to avoid privacy concerns. In December 2011, the Parliamentary Standing Committee on Finance, led by Yashwant Sinha, rejected the National Identification Authority of India Bill, 2010 and suggested modifications. It expressed objections to the issuing of Aadhaar numbers to illegal immigrants. The Committee said that the project was being implemented in an unplanned manner and by bypassing the Parliament.

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.
Aadhaar is a 12 digit unique-identity number issued to all Indian residents based on their biometric and demographic data. The data is collected by the Unique Identification Authority of India (UIDAI), a statutory authority established on 12 July 2016 by the Government of India, under the Ministry of Electronics and Information Technology, under the provisions of the Aadhaar Act 2016.

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).
The Unique Identification Authority of India (UIDAI) was initially set up by the Government of India in January 2009, as an attached office under aegis of Planning Commission vide its a gazette notification. As per the notification, the UIDAI was given the responsibility to lay down plan and policies to implement UID scheme, to own and operate the UID database and be responsible for its updation and maintenance on an ongoing basis.

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).

Under the original policy for liquified petroleum gas subsidies, the customers bought gas cylinders from retailers at subsidised prices, and the government compensated companies for their losses. Under the current Direct Benefit Transfer of LPG (DBTL), introduced in 2013, customers had to buy at the full price, and the subsidy would be then directly credited to their Aadhaar-linked bank accounts. This scheme, however, did not take off, as in September 2013, a Supreme Court order put a halt on it. Subsequently, GOI constituted a committee to review the "Direct Benefits Transfer for LPG Scheme" to study the shortcomings in the scheme and recommend changes. The DBTL scheme was modified later as PAHAL by the new government in November 2014. Under PAHAL, subsidies could be credited to one's bank account even if the one did not have an Aadhaar number. Official data show that cooking gas consumption during the January-June period grew at a slower 7.82%, nearly four percentage points less than 11.4% growth in the same period last year.

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.
On 9 November 2012, the National Institute of Public Finance and Policy published a paper titled A cost-benefit analysis of Aadhaar. The paper claimed that by 2015-16 the benefits of the project will surpass the costs, and by 2020-21 the total benefit would be ₹251 billion (US$3.7 billion) against the total expenditure of ₹48.35 billion (US$720 million). The benefits would come from plugging leakages in various subsidy and social benefit schemes.

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.
In July 2010, UIDAI published a list 15 of agencies which were qualified to provide training to personnel to be involved in the enrollment process. It also published a list of 220 agencies which were qualified to take part in the enrollment process. Before this, the project had been only 20 states and with LIC of India and State Bank of India as qualified registrars. This announcement introduced several private firms. It was estimated that to achieve the target of enrolling 40% of the population in two years, 31,019 personnel would be required and 155 training centres would be required to train them. It was also estimated that 4,431 enrollment centres and 22,157 enrollment stations would have to be established.

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.

In late November 2012, a former Karnataka High Court judge, Justice K. S. Puttaswamy, and a lawyer, Parvesh Khanna, filed a Public Interest Litigation (PIL) against the government in the Supreme Court of India. They had contended that government was implementing the project without any legislative backing. They pointed out that the National Identification Authority of India Bill, 2010 which introduced in the Rajya Sabha was still pending. They said that since UIDAI was running on only an executive order issued on 28 January 2009, it cannot collect biometric data of citizens as it would be a violation of privacy under Article 21 of the Constitution.

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.

The UIDAI is mandated to assign a 12-digit unique identification (UID) number (termed as Aadhaar) to all the residents of India. The implementation of UID scheme entails generation and assignment of UID to residents; defining mechanisms and processes for interlinking UID with partner databases; operation and management of all stages of UID life cycle; framing policies and procedures for updation mechanism and defining usage and applicability of UID for delivery of various services among others. The number is linked to the resident's basic demographic and biometric information such as photograph, ten fingerprints and two iris scans, which are stored in a centralised database.

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).
On 18 June 2015, in a high-level review meeting on the progress of the UID project and DBT scheme, Prime Minister Narendra Modi asked the officials to accelerate the delivery of benefits and expand the applications of the Aadhaar (UID) platform. He also asked them to examine the possibility of incentivizing the states, through a one-time sharing of a portion of the savings. It was reported that the government was saving up to 14-15% in the direct benefit transfers of subsidies on LPG to the beneficiaries through Aadhaar.

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.

On 2 February 2015, the Supreme Court asked the new government to clarify its stance on the project. This was in response to a new PIL filed by Mathew Thomas, a former army officer. Thomas had claimed that government was ignoring previous orders while pushing ahead with the project and that the project was unconstitutional as it allowed profiling of citizens. The government in a reply on 12 February said that it will continue the project. On 16 July 2015, the government requested the Supreme Court to revoke its order, saying that it intends to use Aadhaar for various services. On 21 July 2015, the Court noted that some states were insisting on Aadhaar for benefits despite its order.

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.

The Department of School Education and Literacy, under the Human Resource Developm...

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.
The scheme makes into application the technology of collection of personal as well as biometric information relating to the citizens and encryption of the collected data. However, the failure of the scheme vests in the fact that taking into account the technological as well as the legal background prevailing in our country, the maintenance of a comprehensive database is feasible only when there are sufficient legal mechanisms, enforcement agencies and encryption standards to monitor the protection of data. Further it is pertinent to note that the project infringes upon our right to privacy, which flows from Article 21 and right against self incrimination under Art.20(3).

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.
On 1 July 2014, the former UIDAI Chairman Nandan Nilekani met with the Prime Minister Narendra Modi and Finance Minister Arun Jaitley to convince them of the project's merits. On 5 July 2014, Modi announced that his government retain the project and asked official to look into linking the project with passports. The Budget, allotted ₹20.3964 billion (US$300 million) to the project for the fiscal year 2014-15. It was a substantial increase from the previous year's ₹15.50 billion (US$230 million). Also in July, it was reported that UIDAI would hire an advertising agency and spend about ₹300 million (US$4.5 million) on an advertising campaign.

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.
In September 2013, the Delhi Development Authority accepted a complaint from the India Against Corruption activist group and cancelled a land allotment to UIDAI. The land was previously owned by BSNL, and MTNL had also laid claims on it. It was of an estimated ₹9 billion (US$130 million) value, but it had been allotted to UIDAI at a very cheap rate.

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.

In March 2016, the International Institute for Sustainable Development released a report that the benefit from Aadhaar-linked LPG subsidy scheme for 2014-15 was ₹140 million (US$2.1 million) and for 2015-16 was ₹1.209 billion (US$18 million). This sum was much lower than the number stated by Finance Minister Arun Jaitley in the Lok Sabha. He had said in March 2016 that the government had saved ₹150 billion (US$2.2 billion) from the scheme. The paper said that the government was also including the savings from the efforts of oil marketing companies (OMCs) prior to the introduction of Aadhaar. The method used by the OMCs to weed out duplicates and ghost customers was 15-20 times more effective than the Aadhaar-based method.

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 UIDAI appealed in the Bombay High Court saying that accepting such a request would set precedent for several more such requests. The High Court rejected the argument and on 26 February 2014 in an interim order directed Central Forensic Science Laboratory (CFSL) to study technological capability of the database to see if it can solve such a crime. The UIDAI then appealed in the Supreme Court. It argued that the chance of a false positive was 0.057% and with 600 million people in its database it would result in hundreds of thousands of false results.

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.
On 11 March 2016, the Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016, was passed in the Lok Sabha. During the Rajya Sabha debate on 16 March, Sitaram Yechury of CPI-M said that bill should not have been passed when the issue right to privacy was still in the Supreme Court. On 16 March 2016, the bill was returned to the Lok Sabha by the Rajya Sabha with some suggested amendments. The Lok Sabha was free to accept or reject the amendments. But, Lok Sabha rejected the amendments.

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.

Gajanan Khergamker in a commentary in Tehelka has argued that the Aadhaar threatens to legitimise the illegals living in the country. He said that frequently local bureaucrats and politicians give away documents like ration cards to illegal immigrants for political or personal gains. He pointed out that the Genetic Information Nondiscrimination Act of US prohibits discrimination based on collected biomedical data, but India has no such safeguards for its citizens. He said the data being collected was worth fortunes and India was a "sitting duck" without proper protective legislation.

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.
Other key measures for street children include health insurance, bank accounts and financial sponsorship for families to help meet medical and nutritional requirements of a child.

In other cases, costly technology has been ineffective or, combined with the formalization of identity, has increased the risk of exclusion


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.

In 1999 after the Kargil war, the Kargil Review Committee, headed by security analyst K. Subrahmanyam, was formed to study the state of national security. It submitted its report to the then Prime Minister, Atal Bihari Vajpayee on 7 January 2000. Among its various recommendations, was the proposal that citizens in villages in border region be issued identity cards on a priority basis, later such ID cards should be issued to all people living in border states.

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.

Even though India presently does not have any express legislation governing data protection or privacy, the relevant laws in India dealing with data protection are the Information Technology Act, 2000 and the (Indian) Contract Act, 1872. Let us now analyze how far these provisions succeed in ensuring data protection.

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


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.

The purpose limitation principle requires that data should be processed for a specific purpose and subsequently used or further communicated only insofar as this is not incompatible with the purpose of the transfer. Even though this is the principle, data bases are used private agencies with the aid of data collector itself. There are no proper legislations prohibiting private agencies from such acts.

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 October 2010, R. Ramakumar, an economist at the Tata Institute of Social Sciences, wrote in an editorial for The Hindu that the project was being implemented without any cost-benefit or feasibility studies to ensure whether the project will meet its stipulated goals. He also pointed the government was obscuring the security aspects of Aadhaar and focusing on the social benefit schemes. He quoted former chief of the Intelligence Bureau Ajit Doval who had said that originally Aadhaar aimed to weed out illegal aliens.

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.
Prior to the enactment of the Act, UIDAI functioned as an attached office of Planning Commission since 28 January 2009. On 3 March 2016, a money bill was introduced in the Parliament to give legislative backing to Aadhaar. On 11 March 2016, the Aadhaar Act 2016 was passed in the Lok Sabha. On 26 March 2016, this Act was notified in the Gazette of India.

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.

In July 2014, Employees' Provident Fund Organisation of India (EPFO) began linking provident fund accounts with Aadhaar numbers. In November 2014, EPFO became an UIDAI registrar and began issuing Aadhaar number to provident fund subscribers. In December 2014, Labour Minister Bandaru Dattatreya clarified that an Aadhaar number was not necessary for any provident fund transaction.

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).
On 7 February 2012, the UIDAI launched an online verification system for Aadhar numbers. Using the system banks, telecom companies and government departments could enter an Aadhaar number and verify if the person was a resident of India.

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).

On 26 November 2012, Prime Minister Manmohan Singh launched an Aadhaar-linked direct benefit transfer scheme. The project aimed to eliminate leakages in the system by directly transferring the money to the bank account of the recipient. The project was to be introduced in 51 districts on 1 January 2013 and then slowly expanded to cover all of India.

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 lack of a proper cyber crime policy, encryption policy, cyber security policy etc affects the authenticity of schemes like Unique Identification number. Encryption or encoding is defined as the act of converting data or information into code. In cryptography[12], encryption is the process of encoding messages or information in such a way that only authorized parties can read it.

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.

The Supreme Court, on 24 March 2014, restrained the central government and the Unique Identification Authority of India from sharing data with any third party or agency, whether government or private, without the consent of the Aadhaar-holder in writing. Vide another interim order dated 16 March 2015, the Supreme Court of India has directed the Union of India and States and all their functionaries should adhere to the order passed by this court on 23 September 2013. It observed that some government agencies were still treating Aadhaar as mandatory and asked all agencies to issue notifications clarifying that it was not mandatory.

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.
In October 2014, the Department of Electronics and Information Technology said that they were considering linking Aadhaar to SIM cards. In November 2014, the Department of Telecom asked all telecom operators to collect Aadhaar from all new applicants of SIM cards. On 4 March 2015, Aadhaar-linked SIM cards began to be sold in some cities in a pilot project. The purchase could activate the SIM at the time of purchase by submitting his Aadhaar number and pressing his fingerprints on a machine. It is part of the Digital India plan. The Digital India project aims to provide all government services to citizens electronically and is expected to be completed by 2018.

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.

Work is on to identify existing schemes of the government that can be linked to Aadhaar and brought on the Direct Benefits Transfer platform.

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.

On 3 March 2015, the National Electoral Roll Purification and Authentication Programme (NERPAP) of the Election Commission was started. It aims to link the Elector's Photo Identity Card (EPIC) with the Aadhaar number of the registered voter. It is aims to create an error-free voter identification system in India, especially by removing duplications.

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).

The PAHAL scheme has covered 118.9 million of the 145.4 million active LPG consumers till March, as stated by the Petroleum Minister in the Parliament. Thereby, the DBT has become a "game changer" for India, claimed the Chief Economic Adviser to the Finance Ministry, Government of India, Arvind Subramanian, for in case of LPG subsidy, DBT had resulted in a 24% reduction in the sale of subsidized LPG, as "ghost beneficiaries" had been excluded. The savings to the government were to the tune of ₹127 billion (US$1.9 billion) in 2014-15. The success of the modified scheme helped fuel marketing companies save almost ₹80 billion (US$1.2 billion) from November 2014 to June 2015, said oil company officials. The DBT for the public distribution system (PDS) will be rolled out in September 2015.

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.

On 29 July 2011, the Ministry of Petroleum and Natural Gas signed a memorandum of understanding with UIDAI. The Ministry had hoped the ID system would help them eliminate loss of the subsidised kerosene and LPG. In May 2012, the government announced that it will begin issuing Aadhaar-linked MGNREGS cards. On 26 November 2012, a pilot project was launched in 51 district.

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.

The UIDAI was established on 28 January 2009 after the Planning Commission issued a notification. On 23 June 2009, Nandan Nilekani, the co-founder of Infosys, was appointed by the then government to head the project. He was given the newly created position of the Chairman of UIDAI which was equivalent to a Cabinet minister. In April 2010, the logo and the brand name Aadhaar was launched by Nilekani. In May 2010, Nilakani said he would support a legislation to protect the data held by the UIDAI.

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.
Security and privacy have a fundamental relationship, because they act complimentary, and yet at the same time they are opposed to each other. First, data security and privacy are not the same. Breaches in data security occur when information is accessed without authorization. There is no loss of privacy, however, until that information is misused. Though data security is critical for protecting privacy, the principles of data security call for practices that threaten privacy principles. For example, data security focuses on data retention, logging, etc, while privacy focuses on the consent, constrained access to data, limited data retention, and secrecy[13].

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.

Banks will also have to enable 'Pay to Aadhaar' facility on the BHIM app by March 31 with SBI and PNB asked to provide the facility by the end of the week.

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.

In March 2015, the Aadhaar-linked DigiLocker service was launched, using which Aadhaar-holders can scan and save their documents on the cloud, and can share it with the government officials whenever required without any need to carry them.

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.

The particular clause has been inserted to address concerns raised by civil society groups ...

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.
UPA government had in 2009 formed the authority and launched the programme subsequently to eliminate leaks in subsidies and other social benefits.

" 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.

No other document will be valid to avail subsidy as Aadhaar will be made mandatory for all 84 schemes under direct benefit transfer scheme after June 30.

, 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.

Some civil liberty groups, like Citizens Forum for Civil Liberties and Indian Social Action Forum (INSAF), have opposed the project on privacy concerns.

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.

In May 2013, deputy director general of UIDAI, Ashok Dalwai, admitted that there had been some errors in the registration process. Some people had received Aadhaar cards with wrong photographs or fingerprints. According to Aloke Tikku of Hindustan Times, some officials of the Intelligence Bureau (IB) had criticised the UIDAI project in September 2013. The unnamed IB officials have said that Aadhaar number cannot be treated as a credible proof of residence. As under the liberal pilot phase, where a person claims to live was accepted as the address and recorded.

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).
The issue of constructing UIDAI HQs and UIDAI Regional Office, Delhi's building was resolved with Department of Telecom (DoT). Following which, the Ministry of Urban Development has issued a notification on 21 May 2015 clearing the titles of the land in favour of UIDAI including land use.

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.

Before elections in March 2014, BJP national spokesperson Meenakshi Lekhi and general secretary Ananth Kumar had criticised the project for issuing Aadhaar to illegal immigrants. Lekhi pointed out that project continued to be run even after a parliamentary committee voted againist and despite the Supreme Court order. Subramanian Swamy, another BJP leader and economist, said that UIDAI was a useless scheme and Nilekani should be prosecuted for wasting resources by hiring US firms.

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.
The Aadhaar and the similar National Population Register (NPR) projects have been reported to be having conflicts. In January 2012, it was reported that UIDAI will share its data with NPR and NPR will continue to collect its own data. In January 2013, then Home Minister Sushilkumar Shinde said that Aadhaar was not an identity card but a number, while NPR was necessary for national security purposes. The 2013 Supreme Court order did not affect the NPR project as it was not linked to any subsidy.

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.

Data below is sourced from the State-Wise Saturation Report on the Public Data Portal as of 28 February 2017. Percentage figures are with respect to 2015 estimated population.

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.
In August 2014, Prime Minister Modi directed the Planning Commission of India to enroll all prisoners in India under UIDAI.

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.

Prime Minister Narendra Modi has asked for integration of all land records with Aadhaar at the earliest, emphasising at his monthly PRAGATI (Pro-Active Governance And Timely Implementation) meeting on 23 March 2016 that this is extremely important to monitor the successful implementation of the Pradhan Mantri Fasal Bima Yojana or crop insurance scheme.

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.

During the budget presentation on 29 February 2016, Finance Minister Arun Jaitley announced that a bill will be introduced within a week to provide legislative support to the Aadhaar. On 3 March 2016, the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 was introduced in the Parliament as a money bill by Jaitley. The decision to introduce it as a money bill was criticised by the opposition parties. Ghulam Nabi Azad, an INC leader, wrote in a letter to the Jaitley that the ruling party, BJP was attempting to bypass the Rajya Sabha, as they did not have the majority in the upper house. A money bill is only required to pass in the lower house Lok Sabha. Tathagata Satpathy of Biju Janata Dal (BJD) raised concerns that the project could be used for mass surveillance or ethnic cleansing in the future.

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.

Thus there is no provision mandating the government to protect the data that was made available from the public. Thus introduction of Aadhaar at this stage is highly unwarranted decision. Now let us analyse the adequacy of existing provision on the basis of well established principles.

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.
The said scheme was challenged by Aruna Roy and K. Puttuswamy, the former Judge of Karnataka High Court on the ground that the right to privacy of a citizen is violated by the collection of their biometric information and the same information can be misused.

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.
In March 2014, Nandan Nilekani resigned as the Chairman to contest in the general election on an Indian National Congress nomination from Bangalore South. His responsibilities taken over by 1981-batch IAS officer Vijay Madan, who was given an extension of his term as the director-general and mission director by the government. Nilekani lost to Ananth Kumar.

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.

Aadhaar is not a proof of citizenship, and does not itself grant any rights to domicile in India.

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.
In July 2014, a meeting was held to discuss the possibility of merging the two projects Aadhaar and NPR, or making them complementary. The meeting was attended by Home Minister Rajnath Singh, Law and Justice and Telecom Minister Ravi Shankar Prasad and Minister of State for Planning Rao Inderjit Singh. However, later in the same month, Rao Inderjit Singh told the Lok Sabha that no plan to merge the two projects has been made.

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.
In November 2014, it was reported the Ministry for External Affairs was considering making Aadhaar a mandatory requirement for passport holders. In February 2015, it was reported that people with Aadhaar number will get their passports issued within 10 days, as it allowed the verification process to be easier by checking if applicant had any criminal records in the National Crime Records Bureau database. In May 2015, it was announced that the Ministry of External Affairs was testing the linking of passports to the Aadhaar database.

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).
In July 2014, Aadhaar-enabled biometric attendance systems (AEBAS) was introduced in government offices. The system was introduced to check late arrival and absenteeism of government employees. The public could see the daily in and out of employees on the website However, in October 2014, the website was closed to the public but is now (as on 24 March 2016) active and open to public access. The employees use the last four digits (last eight digits for government employee registring as on August 2016) of their Aadhaar number and their fingerprints, for authentication.

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.

Basic principles with respect to the content of applicable regulations have been established in the adequacy of the protection for personal data provided by a country’s legislation. The Information Technology Act 2000 is neither privacy protection legislation nor data protection legislation as in Europe. It does not establish any specific data protection or privacy principle. But the IT Act is a generic legislation.

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.
Hence, a comprehensive data protection legislation along with proper encryption standards that seeks to install a data protection regime covering both personal and data privacy is in the pipeline.

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.
Bihar government today announced in the state legislative Assembly that government's schemes will be linked with Aadhaar card in order to avail the benefits of the schemes.

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.
The Hon’ble Supreme Court on 24th March 2014 held that the biometric data collected from citizens cannot be shared with anyone. This comment was in connection with the Hon’ble Bombay High Court’s order to hand over the Aadhar Biometric database to C.B.I for facilitating an investigation regarding the murder of a 7 year old girl in Goa.

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.

Aadhaar is the world's largest biometric ID system, with over 1.123 billion enrolled members as of 28 February 2017. As of this date, over 99% of Indians aged 18 and above had been enrolled in Aadhaar.

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.
In Hyderabad region of Telangana state, Aadhaar numbers were linked to ration cards to remove duplicate ration cards. The project was started in July 2012 and was carried out despite the 2013 Supreme Court order. More than 63,932 ration cards in the white category, and 2,29,757 names were removed from its database in the drive between July 2012 and September 2014. In August 2012, Andhra Pradesh, asked citizens to surrender illegal ration cards, before it began to link them with Aadhaar numbers. By September 2014, 15 lakh illegal ration cards had been surrendered. In April 2015, the state of Maharashtra began enrolling all school students in the state in the Aadhaar project to implement the Right to Education Act properly.

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.
On 10 June 2014, the new government disbanded four Cabinet Committees to streamline the decision making process; among them was also the Cabinet Committee on Aadhaar. Also in June 2014, the IT Department held a meeting with the secretaries of the states to receive feedback on the project.

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).

On 23 September 2013, the Supreme Court issued an interim order saying that "no person should suffer for not getting the Aadhaar card in spite of the authority making it mandatory". The court noted that the government had said that Aadhaar is voluntary.

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.
These schemes are Mid-Day Meal Scheme, Sarv Shiksha Abhiyan, Rashtriya Madhyanmik Shiksha Abhiyan, Integrated Child Development Services and Integrated Child Protection Scheme.

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.

Use of Aadhaar cards and seeding of bank accounts with those numbers are purely voluntary and not mandatory, RBI said in a clarification on the Direct Benefit Transfer (DBT) Scheme.

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).

As of 12 March 2017, 1.127 billion Aadhaar numbers had been issued. Over 99% of the 18+ aged population was covered as of this date.

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.

On 11 August 2015, the Supreme Court directed the government to widely publicise in print and electronic media that Aadhaar is not mandatory for any welfare scheme. The Court also referred the petitions claiming Aadhaar is unconstitutional to a Constitutional Bench.

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.
In December 2014, it was proposed by the Minister for Women and Child Development Maneka Gandhi that Aadhaar should be made mandatory for men to create a profile on matrimonial websites, to prevent fake profiles. In July 2015, the Department of Electronics and Information Technology (DeitY) called a meeting of meeting of various matrimonial sites and other stakeholders discuss the use of Aadhaar to prevent fake profile and protect women from exploitation.

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.

Aadhaar project has been linked to some public subsidy and unemployment benefit schemes like the domestic LPG scheme and MGNREGS. In these Direct Benefit Transfer schemes, the subsidy money is directly transferred to a bank account which is Aadhaar-linked.

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.
From the beginning of the project in 2009 through November 2016, the government spent a total of ₹82.772 billion (US$1.2 billion) on the Aadhaar project.

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.
A one stop platform that caters to the pulse of the pulsating healthcare...

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.

The budgeted amount for the project was reduced to ₹9.990 billion (US$150 million) in FY16-17 from ₹20.00 billion (US$300 million) in FY15-16, given the high enrolled percentage.

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.

Electronic-Know Your Customer (e-KYC) using Aadhar card is also being introduced to activate mobile connections instantly to check Aadhar Card Status.

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).


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.

Expenditure by UIDAI (by year) Fiscal year Expenditure
2009-10 ₹262 million (US$3.9 million)
2010-11 ₹2.684 billion (US$40 million)
2011-12 ₹11.875 billion (US$180 million)
2012-13 ₹13.387 billion (US$200 million)
2013-14 ₹15.444 billion (US$230 million)
2014-15 ₹16.153 billion (US$240 million)
2015-16 ₹16.791 billion (US$250 million)
2016-17 (through Nov 2016) ₹6.175 billion (US$92 million)
Total ₹82.772 billion (US$1.2 billion)

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.

The move is significant given that the Supreme Court had reiterated in its earlier orders, as well as in 2015, that Aadhar cannot be made mandatory.


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