522 - UID isn't just a number, it is an identity: Nandan Nilekani

11 SEP, 2010, 

UID isn't just a number, it is an identity: Nandan Nilekani

In view of the fact that the first set of unique identification numbers are just a few weeks away, ET Now caught up with Nandan Nilekani, chairman, UIDAI, for his take on what is on the cards and what does getting a unique identification mean for the masses and how does it is going to benefit the society. 


Excerpts:

We hear that the first set of unique identification numbers are just only a few weeks away, is it?
That is right, a few weeks away.

How many weeks are we talking about here?
A few weeks.

Can you tell us about your target? You have a target of something like 600 million identification numbers in the next 5 years, isn’t it?
Yes, in the next 4 to 5 years. When this project started about a year back, we had said that we would start rolling out the numbers in 12 to 18 months. So we are well within that. It will be around 13-13.5 months we had made that announcement. So we should be on schedule.

What about costing? How much is it going to cost?
The cost is really based on budgets that are being given to us.
Your budget for this year is 1900 crore, isn’t it?
Yes, 1900 crore and we have an overall budget of about 3000 crore and we have basically committed to the first 10 million numbers. Fundamentally, it is great value for money because if you are able to give every Indian a number, it is not just about giving a number, it is about giving them an identity, it is giving them an acknowledgement of their existence by the state and that is really the main thing and it has huge social benefits.

What is this number really going to verify? What would it mean for me when I have it?
You just think of it as your mobile identity. Think of it like the mobile phone versus the landline. When we had a landline, you were fixed to a particular location. If I had to reach you, I have to know you are at home or in office. Now when I call you on your mobile, I do not care where you are. Your mobile number goes with you. So this is also a form of mobile identity, it travels with you and wherever you are we can verify about a person’s identity.

Does it then mean that if I want to open a bank account, then just quoting this number should be enough and that should take care of the KYC?
That obviously requires a little more regulatory changes but yes, the Reserve Bank and the Ministry of Finance are very supportive at least for accounts like no frills accounts, which are really meant for the poor and the impoverished to really participate in the banking system. They will look at how Aadhar number is sufficient for KYC which is a very important step forward which means anybody who has this number should be able to open at least a no frills bank account.

Is financial inclusion then really the top goal for this project?
Financial inclusion is in some sense the first driving application for Aadhar because if we are able to associate opening a bank account with the Aadhar number, it is a step forward. But it is not just about bank accounts. It is about making banking services accessible and it is economically not viable for banks to open a branch in every village. But it is very viable for them to open a business correspondent in every village which the Reserve Bank has done a great job in deregulating that. So that - along with our technology - allows you to now extend the reach of the financial system at a more cost effective manner. So you need both delivery access as well as accounts.

When your project was initially announced and your appointment was announced, there was a lot of confusion about what this project would eventually do? Some people said that Nandan Nilekani is going to issue smart cards. But the scope of your project is really limited to generating random numbers for 1 billion Indians?
Yes, but that number is software in some sense. The number is online. The number can be confirmed online and the number can be used by any product and that is really the difference. Think of it as soft infrastructure. Just like you build highways, you build identity infrastructure for the people.

Unique identification as a project is ahead of target and everyone has great expectations from it. But when one compares a project like UID with a project like CWG, why is it that the Indian state has to have these 2 faces - one that looks promising that looks like it could do something good for the society and the other which is just bumbling, just cannot get anything done?
I really cannot comment on the CWG. All I can say is that the project that I am working on, we have a clear mission, we have extraordinarily committed support from the government, from the Prime Minister, from the Cabinet, from the bureaucracy and we have a very good team working on it.

You are the author of the book Imagining India. Did you have any idea that executing India may be a lot tougher than ‘imagining India’?
Converting your ideas into reality obviously is much more difficult and this is in some sense the biggest execution challenge I have ever dealt with in my life. But that is also what gives me the excitement because it is fun to think through how to do such a large complex humungous project and then of course actually implement on the ground.
The good news is that it is not just me. I am just the guy who gives interviews to you. There is a fantastic team who is actually working day and night. It is probably more than 100 people and it is a very nice mix of diverse people from within government and people from outside government, all working as one team with one mission. That is really what we are most proud of.

What about some of the other areas which also deserve technocratic and meritocratic attention from people of calibres such as yourself? What about things like urban governance which seems to be in shambles?
I was involved with urban governance issues. In fact, I ran something called the BATF in Bangalore many years back and I had a small role in formulating the National Urban Renewal Mission. Certainly that is an area which is of interest to me though I have not been able to focus on it. But I have really focussed in the last one year on areas where you can have technology-enabled transformation because that is in some sense my core competence.

So I did a report for Mr Kamal Nath on how to streamline the electronic tolling system so that you can have one single interoperable tolling system for the country. So a truck starts from Kolkata, goes to Thiruvananthapuram, it pays its toll in the same technology. That is a report which I have put up for them and they are implementing it. 


And the truck does not have to stop and spend innumerable hours?
No, it can just drive through and it will deduct the toll amount. It is basically to improve the logistics and interstate efficiency of goods, movement of goods and all that. So that is one thing which I have worked on. 

Then I have been requested by the finance minister to look at 5 large financial sector projects, including the GST. So a leader group TAGUP (Technology Advisory Group on Unique Projects). It is looking at stuff like GST, tax information network. So the best way for me to add value is to look at projects that have high technology transformation leverage in it and then focus on that.

You talked about the Bangalore Action Task Force. What really is happening to Bangalore? Do you think it has lost the plot as a city, as a magnet for talent?
No, I do not think so. It continues to attract talent the world over. In fact, the technology centre for the Aadhar project is in Bangalore and we have a great set of people who are working there. I continue to draw upon Bangalore as an intellectual capital and I continue to be amazed at the depth and strength and diversity of talent there.

How do you then feel about where corporate India is going in terms of its values, its ethics, it standards?
I personally believe that corporate India has to practice the highest standards of ethical behaviour, transparency and governance. It is being done at Infosys and the reason I believe that is that if we want to believe that corporations and market economy has a role to play, then it is important that the players of that market economy conduct themselves in a way which is of the higher standard. So it is very important that companies do that.

You have always been passionate about a role which is not just restricted to creating value for shareholders, isn’t it?
Yes, I really feel that I am a beneficiary of all the good things in India. I am a beneficiary of modern education. I am a beneficiary of the IIT which was set up by Pandit Nehru. I have been a beneficiary of economic reforms done by Dr Manmohan Singh and others. So when you have benefited, then you feel you should also give it back. So in that sense, I treat this as my giving back period.


Are Indians generally giving back enough to their communities, to their societies?
It is happening. I get extraordinary talent coming up to me and saying I want to be part of your project and they have done that. They have made money and they have done that and they genuinely want to give something back. So there is a lot of untapped idealism and desire to give back among Indians of all ages and we need to figure out ways to tap into that.

How long is India going to be seen as a supplier of cheap software labour?
We have already gone beyond that. There is a huge amount of innovation that is happening in India in technology. It is not actually technologies and business models. What our mobile companies have done is extraordinary. They have gone from Rs 17 a minute in 1996 to a few paisa minute now for talk time and they have reached 500 to 600 million SIM card sales and so forth.

So we are on the verge of a lot of innovation that is going to happen. The innovation will have 3 or 4 requirements. One is the telecommunication revolution, which was started 20 years back by Prime Minister Rajiv Gandhi and Sam Pitroda, is now reaching its fruition and a day is not past where everybody will be having connectivity, having a mobile phone.

The identity infrastructure that we will provide will enable people to take that identity and travel with them which will give them the mobility in a country of increasing mobility. Then the financial inclusion that is possible by lowering cost and using electronic distribution. We will make financial inclusion in a much more widespread manner.

Broadband connectivity is going to happen. Sam is running this whole public information infrastructure initiative. He is driving this initiative to connect all the villages with the broadband. 3G will come, BWA, LTE, all these things will come. So you are going to see a very connected economy and a very connected society and that will lay the ground for innovation.
What about things like education? India has done tremendously well for a developing country in terms of tertiary education, but it has under invested in primary education. Now do you think something like UID could become a fillip?
It is just one piece of the puzzle. I think the good news in education is that parents want their kids to be educated and kids want to be educated. So everybody has connected the dots between education and social mobility and all that. So that’s I think is done.

Second point is that I think the government is spending huge amounts of money on education and the Right to Education Bill and the budgets are really going up very well. So I think it is boiling down to the delivery issue and certainly you can use technology, but you also need your teachers and attendance and all that stuff. But I do believe that we can use UID for education and that’s the conversation that we are having right now with the Ministry of HRD.
Is it because there is a view that perhaps the government should simply hand out education vouchers to parents who want to get their children educated by the private sector?
Well this is a broad debate as to whether you deliver the service or you deliver the capacity to procure the service. Whether it’s an education voucher or a food voucher or some other voucher or energy voucher, it’s all the same thing. Does government deliver the service or does government give you the means to buy the service? This often has ideological connotations.

My personal view is that I am really neutral on that. I do believe that the infrastructure that we will provide will allow everyone to have an identity so that they can confirm what service they want to get, the fact that people can have bank accounts so that they can get and receive money. We can have non-bank account. For example, we can have a food account which has your let’s say entitlement of food and deducts and adds to that just like a bank account. The fact that you can communicate with everyone and everywhere, now provides us the basic infrastructure - sort of a soft infrastructure - to really get down to the issue of public service delivery.

Post the financial crisis of 2008 world over the role of state in society is being rethought. It is increasingly looking like that the US is going to resemble Europe and perhaps India, which has already creating a lot of entitlements, is going to become a more and a bigger welfare society with the state playing a very large role. What is your view on this?
No, there is no question that the state has to play a large role on social welfare, on creating a social welfare net, on enabling opportunity so that people have access to opportunities and so forth. What you are seeing happening here - if you take a historical view - is no different from what happened in the US in the 1930s and 1940s after the Depression when Roosevelt brought in the new deal. He brought in the idea of social security, food for work, all the things that have happened in the US.

Then post World War II, in Britain, you had again a social welfare system that was done after the Beverage Report. They came out with the natural insurance number in the UK. They came out with the social security number in the US. So we are now in some sense at a similar point where we are rolling out ambitious social welfare programmes and the kind of stuff that we do is essentially building the underpinnings to make that better.

Talking about migrant workers, how is the UID going to simplify their lives?
For example, with somebody who works on a construction site often what happens is that his current employer will open a provident fund account for him and deposit money into that account. But they often change their jobs and he may go to another town and work on another project for another company and because the transfer of that takes some time, they open a new account and then it keeps on like that.

So we think stuff like Aadhar can act as a thread which sort of ties up all these things so that your transfer happens fast. The fundamental issue I believe is that our systems are designed for an assumption of static presence. A person is there always in one village, a person works his whole life in one company, a person spends the entire life living in one city - those kinds of assumptions whereas India is a hugely migrant country. 

We have 100 million migrants and in the next 20 years - because of the demographic difference between middle India and coastal India and climate change and whole host of things - the migration is just going to go up dramatically and we must design our systems taking into account the mobility of the modern Indian.

Your Aadhar will cover all resident Indians. Will that then also mean that it will cover illegal aliens that we know are amongst us?
Aadhar is only a proof of identity. It is not a proof of citizenship. So any resident Indian who meets the standards laid down in our verification document, which is on a website, will get a number. It is still obviously the other agencies who look at issues of nationality.
Why is the scheme not open to NRIs? Is there some sort of thinking behind this?
It is just that at this point the project is for resident Indians, but the act will provide for the government to take a call on other categories.

We are now faced with the emergence of a new kind of modern Indian CEO, modern Indian entrepreneur whose fortunes are tied to scarce natural resources. When that happens, you get a Russia kind of a situation with allegations of cronyism, of nepotism and a whole lot of rape and plunder. What is your view on this?
Certainly where natural resource is concerned, we have to be very careful and we have to have equitable solutions because firstly it’s national property and secondly, there are a lot of people who live there and who will be displaced. Those people should also have to participate in any fruit of that extraction.

What you think about the issue of corporate succession that India Inc is now faced with? Mr. Murthy said the other day that it could just be that one could have a foreigner at the helm at Infosys. What is your view?
I left Infosys on July 9, 2009 and since then I have been observing it from the outside like everybody else. So I think we need to have the best leaders in any organisation.

What about their nationality, their colour of their skin, the language that they speak? Should that matter?
I think if I am building a truly professional global company, then we should look at management from everywhere.
But does Infosys have an Indian core that you think is best?
I leave it to the board to figure that out and sense what the leadership should be.

Talking about the role of the CEO in the society in public service, do you think that others could also join in? Do you think Mukesh Ambani could be persuaded to come and do something for infrastructure?
You should ask that question to Mukesh. But I come from a school of thought which believes that business leaders - after they have achieved a certain modicum of success in business - should spend a few years in giving the time and whatever skills they have for public service and this is a very US model. The US have seen this tradition for 100 years and many famous American businessman went on to serve in governments. So I believe in that model, but also at the same time, I believe it should be done after you have exited like I quit everything. I quit Infosys. I quit all the boards I was on and everything because I did not want any conflicts. So it has to be done with that kind of separation.
How much easier or tougher has it been for you to work in the government than you thought?
Actually it has been in some sense much easier than I thought. First because I have got great cooperation and collaboration from everyone starting from the Prime Minister. The second is that in government - as in everything else - if you are able to articulate your value proposition and offer a win-win kind of an approach to people, then they accept it just like in business. I have been able to assemble great talented team both from the government and from the private sector. Also, I find that there is a great potential for big ideas in government. Often the small things are difficult to do, but the big things are easier to do. So I just focus on the big things and do not sweat the small things.
What could be the next big thing – let’s say Nandan Nilekani 5 years from now? What would you like to attempt?
Actually I am very happy doing what I am because I think that as the state takes on more responsibilities like providing social welfare and all that, it also needs to infuse a capacity and a lot of that capacity is technology in transformation and that’s where I am. So I think there will be many-many such opportunities for me to participate in the change and if I am given an opportunity to do that, I will keep doing that.

What do you miss from your former life?
Well I miss living in Bangalore. So that’s one thing. I miss the company and camaraderie of my colleagues in Infosys. I spent 30 years. So we are very close, we are almost like family and you always had a collective sounding board. So some of that I miss. At the same time, this is an exciting new challenge. So I am completely focused on that.