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Moving

well…

ZTopic of the week : 16

thto 22

ndJanuary 2012

Topic : India’s UID Scheme 

  FOR a country that fails to meet its most basicchallenges—feeding the hungry, piping clean water, fixingroads—it seems incredible that India is rapidly building theworld’s biggest, most advanced, biometric database of personal identities.

  Launched in 2010, under a genial ex-tycoon, NandanNilekani, the “unique identity” (UID) scheme is supposedto roll out trustworthy, unduplicated identity numbers

based on biometric and other data. 

  The goal, says Mr Nilekani, is to help India cope with thepast decade’s expansion of welfare provision, the fastest inits history: “it is essentially about better public services”. 

  A year ago, only a few million had enrolled and barely 1m

identity numbers had been issued. Warnings about fragile

technology, overwhelmed data-processing centres and

surging costs suggested slow progress.

  Instead this week saw the 110-millionth UID number

issued. Enrolments should reach 200m in a couple of 

weeks. Mr Nilekani says that over 20m people are now

being signed up every month. He expects to get to 400m

by the year’s end.

  That is an astonishing outcome. For a government that has

achieved almost nothing since re-election in May 2009, the

scheme is emerging as an example of real progress. By

2014, the likely date of the next general election, over half 

of all Indians could be signed up. If welfare also starts

flowing direct into their accounts, the electoral

consequences could be profound.

Read further : http://www.economist.com/node/21542814 http://articles.timesofindia.indiatimes.com/2012-01-11/ranchi/30615852_1_biometric-and-demographic-data-fingerprint-data-aadhaar  

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Concerns…

  As it grows, however, the project is drawing fire. Most pressing,the mandate of the UID authority will expire within weeks—oncethe 200 millionth resident is signed up. 

  Total costs are rising as UID expands: its budget has more thandoubled from nearly 32 billion rupees ($614m) for the first fiveyears, to over 88 billion rupees for the next phase. But thegovernment’s chief economic adviser, Kaushik Basu, among

others, agrees that savings by “plugging leakages”—that is,stopping huge theft and waste in welfare and subsidies—will be

 “very big, very beneficial”. 

  The real difficulties are political. Most immediate is the homeminister, P. Chidambaram, who is blocking the new mandate.He says he worries about national security. He also looksannoyed that a rival biometric scheme to build a NationalPopulation Register (for citizens, not just residents) has beencast into the shade. Run by his home ministry, by late last yearit had only issued some 8m identity numbers.

  Last month, for example, parliament’s powerful finance standingcommittee issued a 48-page report attacking UID, calling ithasty, directionless, ill-conceived and saying it must be stopped. 

  The report contains testimony from a range of experts withlegitimate objections. Some were procedural, including ademand that UID be based on law passed by parliament, not, asnow, on a mere executive order. 

  Other worries, such as cost, should abate as the uniqueidentities are tied to bank accounts of welfare recipients, and sohelp track the flow of public money. The omens are good. Lastweek Karnataka state claimed that by paying welfare direct tobank accounts it had cut some 2m ghost labourers from a ruralpublic-works project. 

  activists and development economists, such as Jean Drèze andReetika Khera, worry that the voluntary programme will turncompulsory, that individuals’ privacy is under attack and thatbiometric data are not secure. 

  Once recipients have bank accounts, India can follow the likes of Brazil and replace easily stolen benefits in kind, such as rationsof cheap food and fuel, with direct cash transfers. Not only dothese cut theft, but cash payments also let beneficiaries become

mobile—for example so they can leave their state to seek work,while not jeopardising any benefits. 

  However some fear that money is more easily wasted, say onalcohol. Worse, in the most remote places, cash welfare is nouse since food and fuel markets do not even exist. 

  Such fears need answering. India will have to pass a law on dataprotection and privacy. A shift to cash welfare would have toensure that mothers benefit most, not feckless fathers. Andperhaps only as Indians grow more urban, mobile and well-connected will they see the full advantage of cash over rations.

But for all the headaches, applying the UID to an expanding andreforming welfare system opens the way for profound socialchange. Indians need to get ready.