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


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.


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Tuesday, January 31, 2017

10810 - Note ban: Modi followed script by Google, Visa, Paytm, says scribe

Photo by Sanjeev Kumar/Hindustan Times via Getty Images
File photo of people waiting in queues for cash outside an ATM of Sutlej Gramin Bank in Bathinda, Punjab, in December, 2016

Note ban: Modi followed script by Google, Visa, Paytm, says scribe

German business journalist and blogger Norbert Häring in his latest blogpost on Tuesday writes on how in July, 2016, Boston Consulting Group and Google laid down the road map for demonetisation

Norbert Häring
Jan 25th 2017, 04.37 PM

Boston Consulting Group (BCG), the omnipresent US-consulting company, and Google, the global data miner, issued a joint report in July 2016 on the “$500 billion Pot of Gold”, which is the Indian digital payment market.

Even though the authors deny it, the report gives much reason to suspect that the authors knew that something radical was imminent from the Indian government. The report is remarkably honest about the aims of the whole exercise.

There is no statement in the BCG-Google-report “Digital Payments 2020” to the effect that it is related to the joint initiative of USAID and the Indian ministry of finance, formally established in 2015, to push back the use of cash and promote digital payments. Rather it is presented as a freestanding initiative of BCG and Google.

I reached out to one of the authors, BCG’s senior partner Alpesh Shah, to ask about this and he insisted:“This was a joint BCG-Google report, with no connection/ relation to USAID/Indian Ministry of Finance.” However, there is much to suggest that there was a connection.

First of all, the subject so perfectly fits with the program of that partnership. The subtitle of the report is “The Making of a $500 billion ecosystem in India”. The steering committee for the report included a representative of Visa, member of the Better Than Cash Alliance together with USAID and affiliate of the partnership of USAID and Indian finance ministry to advance digital payments. It also included Paytm and Vodafone, which are also part of the CATALYST coalition, a project, which according to USAID, is a “next step” in said partnership of USAID and the Indian finance ministry.

The report is a call to arms for all payment service providers. They are alerted that things are going to be shaken up in India. On page three it says:

“We expect the digital payments space to witness significant disruption in the days ahead.”

Photo by Ravi Choudhary/Hindustan Times via Getty Images

File photo of people standing in queue for banking transactions outside a bank in Delhi in December, 2016

The disruption came on November 8, when Prime Minister Modi decreed that most of the cash notes by value were no longer legal means of payment. By itself, the remark about the “disruption in the days ahead” might be considered suggestive, but weak evidence that BCG and Google knew something of those plans.

However, combine this with the fact that they forecast a tenfold increase of digital payments and of the merchant acceptance network by 2020 without giving any real compelling reason why such an unlikely development should come to pass.

In fact, the report is pretty heavy on reasons why it will be difficult to get many more merchants on board and says that the acceptance network has more or less stagnated in recent years. From stagnant, the growth rate has to jump to at least 60 percent per year (if you want to start 2015, more if the baseline is 2016) to make the forecast of a tenfold increase by 2020 come true.

The only real reason given in the report for the expected stellar increase is mobile payment apps becoming available. This is not a very convincing reason for a large jump in the growth rate, as these apps have been around for a number of years already.

“By itself, the remark about the “disruption in the days ahead” might be considered suggestive, but weak evidence that BCG and Google knew something of those plans. However, combine this with the fact that they forecast a tenfold increase of digital payments and of the merchant acceptance network by 2020 without giving any real compelling reason why such an unlikely development should come to pass.”
Norbert Häring

Asked about the apparent improbability of the forecast – barring knowledge of the impending banning of most cash notes – Mr. Shah nonetheless insists that the authors knew nothing of Modi’s plans and adds:

“We saw no option for the country but to try and move digital, and we could see some of the trends in that already. Add to that the Indian government’s stated objective of going digital, and we arrived at the conclusion that this was the most likely scenario, with the government incentivising non-cash (as has been seen in many countries).”

BCG and Google did not leave it to the government to follow up on their stated objective, but wanted to help by listing a number of “tasks of the government”.

Instructions included first and foremost that the government build awareness of the cost of cash by talking about the "cost of printing notes, countering counterfeiting (by several means, including periodically introducing new series of currency notes and withdrawing existing ones), and indirect costs (loss of tax revenue, creation /prevalence of black-market money etc.).”

One cannot blame the Modi-government of being disobedient. Modi has been talking of little else with such persistence and resolve as about the cost of cash and the cost of countering counterfeiting and tax avoidance which is facilitated by cash. He made all ordinary Indians feel the "cost of periodically introducing new series of currency notes and withdrawing existing ones”.


FORGET ABOUT THAT FINANCIAL INCLUSION TALK
The refreshing thing about this report is that BCB (sic) and Google skip all the talk about financial inclusion, helping the poor and all that. The frankness must have to do with their intended audience, which is not the general public, but rather payment services providers and the government.

The results of the large survey among merchants and consumers that they commissioned make it plain that those merchants and consumers who do not yet rely on digital payments are not longing for a chance to do so. The survey indicated they are completely happy with using cash and think the requirements for digital payment are too complicated for them.

“The “tasks from regulators and government” which BCG and Google list in their report are not part of a non-existent chapter on helping the poor or helping India develop, but part of the chapter “Grabbing the opportunity – the winning agenda”. In other words, the government is urged to help Visa and Google to grab the pot of gold.”
Norbert Häring

The study authors leave no room for doubt, that the digitalization drive is all about business and nothing else. One chapter-header reads, “India Digital Payments – A $500 Pot of Gold” and the authors calculate that the projected $500 bn of digital payments a year translates into $5 bn in revenue.

Google would not be Google, if the giant data miner did not have some ideas to make the pot even a little bigger. “Mine customer data to build additional revenue streams” is their advice to payment services providers. BCG and Google promise that mining customer data will help them to get consumers to buy more. “Payments will drive consumption – and not the other way around” is an insight they want to drive home.

The “tasks from regulators and government” which BCG and Google list in their report are not part of a non-existent chapter on helping the poor or helping India develop, but part of the chapter “Grabbing the opportunity – the winning agenda”. In other words, the government is urged to help Visa and Google to grab the pot of gold.


WITH A LITTLE HELP FROM THE GOVERNMENT
And the government certainly was willing and ready to help.

In August, one month after BCG and Google presented their report, the government assembled a committee, the Watal-Committee, to see what it could do and have the necessary legal acts readied.

The committee came up with a long list of measures, laws and rule that would help the payment industry grab the pot of gold, including exempting imported digital payment equipment from tariffs. Declaring most cash notes void and leaving the population without sufficient cash for months was of course the best thing for enlarging the pot of gold for payments services providers that anybody could have imagined.

All of this, of course, is not just intended to help Google, Visa and the payment services providers from India and Asia on the steering committee of this report. The bulk of the pot can be expected to be grabbed by the payment services industry of the US (empasis added). As a recent “Framework for FinTech” issued by the US National Economic Council states:

“The United States remains the global leader in fintech as measured by total investments. However, the U.S. leadership position in fintech should not be taken for granted. The U.S. government should continue to develop a policy strategy that helps advance the sector (…) and maintain a robust competitive advantage in the technology and financial services sectors.”

The whitepaper refers to “Recent Trends in U.S. Services Trade: 2016 Annual Report” where we learn that exports of banking services in 2015 have been $74.2 bn and imports $17.9 bn, for a very solid excess of exports over imports of $56.3 bn or 400 percent.

This is what the Indian digitalization effort and the friendly help of USAID, the Gates Foundation, Visa, Mastercard and other seekers of the pot of gold is all about: “a policy strategy that helps advance the sector and maintain a robust competitive advantage" for the US payments industry.


Norbert Häring is a business journalist with a focus on monetary issues, based in Germany. He tweets at @norberthaering


This article first appeared on the writer’s blog on January 24, 2017