uid

When I opposed Aadhaar in 2010 , I was called a BJP stooge. In 2016 I am still opposing Aadhaar for the same reasons and I am told I am a Congress die hard. No one wants to see why I oppose Aadhaar as it is too difficult. Plus Aadhaar is FREE so why not get one ? Ram Krishnaswamy

First they ignore you, then they laugh at you, then they fight you, then you win. -Mahatma Gandhi

In matters of conscience, the law of the majority has no place. Mahatma Gandhi

“The invasion of privacy is of no consequence because privacy is not a fundamental right and has no meaning under Article 21. The right to privacy is not a guaranteed under the constitution, because privacy is not a fundamental right.” Article 21 of the Indian constitution refers to the right to life and liberty -Attorney General Mukul Rohatgi

“There is merit in the complaints. You are unwittingly allowing snooping, harassment and commercial exploitation. The information about an individual obtained by the UIDAI while issuing an Aadhaar card shall not be used for any other purpose, save as above, except as may be directed by a court for the purpose of criminal investigation.” -A three judge bench headed by Justice J Chelameswar said in an interim order.

Legal scholar Usha Ramanathan describes UID as an inverse of sunshine laws like the Right to Information. While the RTI makes the state transparent to the citizen, the UID does the inverse: it makes the citizen transparent to the state, she says.

Good idea gone bad
I have written earlier that UID/Aadhaar was a poorly designed, unreliable and expensive solution to the really good idea of providing national identification for over a billion Indians. My petition contends that UID in its current form violates the right to privacy of a citizen, guaranteed under Article 21 of the Constitution. This is because sensitive biometric and demographic information of citizens are with enrolment agencies, registrars and sub-registrars who have no legal liability for any misuse of this data. This petition has opened up the larger discussion on privacy rights for Indians. The current Article 21 interpretation by the Supreme Court was done decades ago, before the advent of internet and today’s technology and all the new privacy challenges that have arisen as a consequence.
Rajeev Chandrasekhar, MP Rajya Sabha

“What is Aadhaar? There is enormous confusion. That Aadhaar will identify people who are entitled for subsidy. No. Aadhaar doesn’t determine who is eligible and who isn’t,” Jairam Ramesh

But Aadhaar has been mythologised during the previous government by its creators into some technology super force that will transform governance in a miraculous manner. I even read an article recently that compared Aadhaar to some revolution and quoted a 1930s historian, Will Durant. Rajeev Chandrasekhar, Rajya Sabha MP

“I know you will say that it is not mandatory. But, it is compulsorily mandatorily voluntary,” Jairam Ramesh, Rajya Saba April 2017.

August 24, 2017: The nine-judge Constitution Bench rules that right to privacy is “intrinsic to life and liberty” and is inherently protected under the various fundamental freedoms enshrined under Part III of the Indian Constitution

"Never doubt that a small group of thoughtful, committed citizens can change the World; indeed it's the only thing that ever has"

“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.” - Edward Snowden

Special

Here is what the Parliament Standing Committee on Finance, which examined the draft N I A Bill said.

1. There is no feasibility study of the project]

2. The project was approved in haste

3. The system has far-reaching consequences for national security

4. The project is directionless with no clarity of purpose

5. It is built on unreliable and untested technology

6. The exercise becomes futile in case the project does not continue beyond the present number of 200 million enrolments

7. There is lack of coordination and difference of views between various departments and ministries of government on the project

Quotes

What was said before the elections:

NPR & UID aiding Aliens – Narendra Modi

"I don't agree to Nandan Nilekeni and his madcap (UID) scheme which he is trying to promote," Senior BJP Leader Yashwant Sinha, Sept 2012

"All we have to show for the hundreds of thousands of crore spent on Aadhar is a Congress ticket for Nilekani" Yashwant Sinha.(27/02/2014)

TV Mohandas Pai, former chief financial officer and head of human resources, tweeted: "selling his soul for power; made his money in the company wedded to meritocracy." Money Life Article

Nilekani’s reporting structure is unprecedented in history; he reports directly to the Prime Minister, thus bypassing all checks and balances in government - Home Minister Chidambaram

To refer to Aadhaar as an anti corruption tool despite overwhelming evidence to the contrary is mystifying. That it is now officially a Rs.50,000 Crores solution searching for an explanation is also without any doubt. -- Statement by Rajeev Chandrasekhar, MP & Member, Standing Committee on Finance

Finance minister P Chidambaram’s statement, in an exit interview to this newspaper, that Aadhaar needs to be re-thought completely is probably the last nail in its coffin. :-) Financial Express

The Rural Development Ministry headed by Jairam Ramesh created a road Block and refused to make Aadhaar mandatory for making wage payment to people enrolled under the world’s largest social security scheme NRGA unless all residents are covered.


Wednesday, February 3, 2016

9273 - Getting into JAM, and possibly out of another - Financial Express


It remains to be seen whether payments banks and PPI players essay the role of competitors or complements to traditional banks, or act as both.
By: Rajat Kathuria | January 18, 2016 1:04 AM

As India finds itself truly on the cusp of a digital revolution, the way consumers, businesses and governments operate and collaborate has changed dramatically. And it will continue to do so, occasionally being awkwardly disruptive. In particular, with increasing mobile and internet penetration, the financial architecture of the country has undergone an unprecedented transformation. A billion mobile connections, growing smartphone penetration and internet access having already crossed 300 million, the potential power of this revolution keeps swelling.

The mobile phone has become a vehicle for sophisticated financial integration, as made evident by the expanding usage of prepaid payment instruments and mobile banking. There has been renewed focus on reaping the benefits of digitisation even on part of the government, with recent initiatives such as Digital India and Jan-Dhan Yojana (JDY) attempting to bring the marginalised and unbanked to the fore, particularly through the use of technology. A total of 196 million bank accounts have been opened and 167 million RuPay cards have been issued under the latter, indicating the large unmet demand for banking services. The JDY forms the core of the government’s strategy—with a bank account, every household could potentially gain access to banking and credit facilities and participate in the formal system. The Aadhaar identity card is envisaged as the sole KYC proof, besides serving as the backbone for Direct Benefit Transfer (DBT) when linked to bank accounts. As of December 2015, nearly a billion citizens have been allocated an Aadhaar card. Linking the Aadhaar number to an active bank account is part of the inclusion drive of the government, by making income transfers predictable and targeted. There is already evidence that payments through Aadhaar-linked bank accounts have increased efficiency and reduced leakages.
As the Jan-Dhan-Aadhaar-Mobile (JAM) trinity leads the disruptions in the traditional banking and payments market in India, the financial landscape has been altered further by Reserve Bank of India’s (RBI) decision to grant licences to 11 payments banks in August 2015—the first instance of differentiated licensing in India’s banking history. These payments banks have been allowed to maintain deposits up to R1 lakh per customer, in addition to issuing debit cards, offering financial products such as insurance and mutual funds, and utility bill payments. They will be especially relevant for low-income consumers, small enterprises and workers in the unorganised sector. As they are permitted to invest only in government paper, long-term profitability will come through scaling up (by expanding the volume of transactions)—a possibility that is real given the large unmet demand for financial services, increasing smartphone penetration and the spectacular rise of e-commerce. Technology increasingly affords the opportunity to improve delivery which has been the Achilles’ heel of many well-intentioned schemes in the past. In particular, there are technologies that enable better targeting and transfer of financial resources to households. Technology causes displacement and there are clear implications for competitiveness in the sector as these entities take over some of the functions of traditional banks and help facilitate otherwise costly micro-transactions.

The list of licensees includes corporate giants such as Bharti Airtel, Reliance Industries Ltd (RIL), Vodafone m-pesa, etc, in addition to the Department of Posts. Both these categories of entrants have the advantage of leveraging an expansive and far-reaching customer base as well as existing infrastructure to address the problem of last-mile access to financial services—a deficiency that traditional banks have so far been unable to overcome. The new entrants have the flexibility to engage in price competition and price discrimination, and are likely to pose real challenges to traditional banking. Recognising the need to keep up with these innovations, some traditional banks have already decided to collaborate with these niche banks. The State Bank of India (SBI) has partnered with RIL with an equity share of 30% and Kotak Mahindra Bank has agreed to acquire a stake of 19.9% in Bharti Airtel’s payments bank venture.

Payments banks are not the only likely source of disruption in this space—the increasing prevalence of prepaid payment instruments has revolutionised the way consumers transact. According to the statistics published by RBI, the value of prepaid instruments (PPIs) has increased fourfold, from R62.01 billion in 2011-12 to R243.62 billion in 2015-16 (until October 2015). In particular, the value of transactions made through mobile wallets (or e-wallets), which account for 40% of the value of all PPIs, has increased tenfold, from R10.01 billion in 2012-13 to R97.46 billion in 2015-16 (until October 2015). In fact, in terms of volume, transactions through e-wallets have long surpassed those made through mobile banking.
Most of these wallets function as semi-closed PPIs, allowing consumers the convenience of not having to load their bank account or debit/credit card details and go through the cumbersome two-step verification procedure each time they transact. Additionally, they make possible peer-to-peer transfers and micro-transactions, which were not previously feasible through traditional banking methods. Some of these wallets (Mobikwik, Paytm) also allow direct loading of cash into accounts, rendering the process even simpler for consumers who are new to digital payment methods and making digital transactions available to those who do not have bank accounts. Cash-back offers, loyalty rewards and discounts are offered by all wallet providers, making their products more attractive in comparison to credit/debit cards and mobile banking. To fill the gaps in achieving last-mile financial integration in rural areas, the key players are collaborating with kirana stores and are setting up kiosks to facilitate easy top-up of digital wallets. With a focus on increasing convenience, capturing unmet rural demand and incentivising consumers through innovative schemes, mobile wallets have become a force to reckon with.
Both payments banks and PPI players have shown alacrity in understanding the diverse and evolving needs of consumers, and have used technological innovations to adapt to them. Having completely altered the way consumers transact and save, these disruptors have become key competitors for traditional banking institutions. Incumbent response to these threats has been predictable—some large banks have imposed restrictions on the usage of their digital infrastructure. For example, SBI and its subsidiaries recently disallowed customers from loading their Paytm wallets through their accounts. Users of Oxigen, another digital wallet provider, face similar constraints as they are barred from topping up their wallets by the payment gateways of SBI and CitiBank. Even as the entrants enjoy the first-mover advantage, banks have been trying to catch up by introducing their own instruments, hoping to put to use their existing infrastructure and customer base. SBI, HDFC Bank, Axis Bank as well as ICICI Bank have introduced digital wallets, prepaid cards and options for peer-to-peer transactions, in addition to providing discounts and cash-back offers to compete with third-party players.

With these disruptions already starting to transform the banking sector, it remains to be seen whether payments banks and PPI players essay the role of competitors or complements to traditional banks, or act as both. However, it is clear that intense competition and innovation, resting on the backbone of the ongoing digital revolution, is set to benefit consumers and help achieve broader policy goals of financial inclusion.

Rajat Kathuria & Vatsala Shreeti

Kathuria is director & chief executive, Shreeti is research assistant at the Indian Council for Research on International Economic Relations (ICRIER). Views are personal