In a world of global flows of wealth, power, and images,the search for identity-collective or individual, ascribed or constructed-becomes the fundamental source of social meaning, says Nandan Nilekani
It succinctly reflects the power of identity1 in today's world and this is no way more evident than in India where thousands are denied basic rights and benefits due to the lack of an identity. The UID (unique identification number, now known as Aadhaar) project2 is a critical component of the inclusive growth that we all seek. If India is going to achieve economic prosperity as well as social equality, we not only have to grow but we have to grow along a path where people are not left behind in the process of change. Identity would be an important aspect in achieving this. A national identification number or National Identity Card number is used by the governments of many countries as a means of providing their citizens, permanent residents, and temporary residents with services in the areas of work, taxation, government benefits, health care, and other governmentrelated functions. The ways in which such a system is implemented varies between countries, but in most cases, an individual is issued a number at birth or when they reach a legal age (typically the age of 18).
In Chile, for instance, the National Identification Number is called RUN (Rol Único Nacional). It is used as a national identification number, tax payer number, social insurance number, passport number, driver 's licence number, for employment, etc. It is also commonly used as a customer number in banks, retailers, insurance companies, airlines, etc.
Since 2004, every newborn baby has a RUN number; before it was assigned at the moment of applying to get the ID card. Non-Chilean residents also get a RUN and an identification card. In China, an ID card is mandatory for all citizens who are over 16 years old. The 18-digit ID card is used for residential registration, army enrolment, registration of marriage/divorce, going abroad, taking part in various national exams, and other social or civil matters.
In Denmark, a Personal Identification Number called a "CPR" number is used in dealings with public agencies, from health care to the tax authorities. It is also commonly used as a customer number in banks and insurance companies.3
In the United States, people have been getting Social Security Numbers for decades. In 1936, the Social Security Administration established the Social Security Number to track worker's earnings for social security benefit purposes. Despite its narrowly intended purpose, the SSN is now used for a myriad of non-Social Security purposes. Today, SSNs are used, in part, as identity verification tools for services such as child support collections, law enforcement enhancements, and issuing credit to individuals.
In India, the purpose of the UID project is very simple; it is to give every Indian resident a unique number, preventing the kinds of duplication that currently exists. The complexity of the issue lies in ensuring that everybody in a population of 1.2 billion gets a unique number, and therein lies an enormous challenge of scale and technology. But issuing a unique number is just one part of the challenge. The other part is making sure that this number is used effectively. For this purpose, the UIDAI (Unique Identification Authority of India) is providing an online authentication capability. In such a scenario, we will be able to verify online anyone claiming to be Mr. XYZ with the unique number 123 as actually being that person. This combination of de-duplication and having unique numbers on one end, and the existence of online authentication at the other end is the core of the solution that the UIDAI is seeking to achieve.
Now, what is the advantage of this? What does the issuance of a number mean in terms of inclusion? The Aadhaar has several important ramifications, the effects of which will be far-reaching. The first is that an Aadhaar will give a person a recognised identity. It is not that people do not have any identity today, but the number will give identity with respect to the State. For people already having driver licences, passports, bank accounts, credit cards and PAN cards, this probably means little. But there are a few hundred million people in the country who face a lot of challenges in proving their identity. They do not have birth certificates; many of them have not gone to schools and, therefore, they do not have school certificates; and there are 75 million homeless families who do not have an address. Without these documents, and when you do not have an address, you have no real, documentary proof of who you are. This failure to prove one's identity denies many facilities to our citizens. For example, if one wants to get a mobile phone today, then one has to go through what is known as the KYC (know your customer) process. Here, the mobile company will actually check and verify an applicant's identity. But for people who have no such documentary proof of identity, it is very difficult to access a mobile phone connection. Similarly, if somebody goes to a bank to open an account, he is unable to do so unless he goes through the bank's KYC process. This absence of an effective identity infrastructure has also been sharply felt by both government and service providers.
In the last few years, we have had significant increases in our social welfare spending, and we have a large number of initiatives that go towards giving benefits to the poor. However, the effectiveness of these efforts are limited due to the problem of proving identity, and reaching these services across the last mile. This becomes particularly important since we are now in a period of rapid economic growth. Such growth can only be inclusive if people across the country have similar levels of access to the opportunities, 36 Building from the Bottom and resources from economic development. The lack of identity however, again limits many millions from accessing the jobs, the opportunities for education, better financial resources, and the chances for entrepreneurship that emerge out of India's growth.
In Chile, for instance, the National Identification Number is called RUN (Rol Único Nacional). It is used as a national identification number, tax payer number, social insurance number, passport number, driver 's licence number, for employment, etc. It is also commonly used as a customer number in banks, retailers, insurance companies, airlines, etc.
Since 2004, every newborn baby has a RUN number; before it was assigned at the moment of applying to get the ID card. Non-Chilean residents also get a RUN and an identification card. In China, an ID card is mandatory for all citizens who are over 16 years old. The 18-digit ID card is used for residential registration, army enrolment, registration of marriage/divorce, going abroad, taking part in various national exams, and other social or civil matters.
In Denmark, a Personal Identification Number called a "CPR" number is used in dealings with public agencies, from health care to the tax authorities. It is also commonly used as a customer number in banks and insurance companies.3
In the United States, people have been getting Social Security Numbers for decades. In 1936, the Social Security Administration established the Social Security Number to track worker's earnings for social security benefit purposes. Despite its narrowly intended purpose, the SSN is now used for a myriad of non-Social Security purposes. Today, SSNs are used, in part, as identity verification tools for services such as child support collections, law enforcement enhancements, and issuing credit to individuals.
In India, the purpose of the UID project is very simple; it is to give every Indian resident a unique number, preventing the kinds of duplication that currently exists. The complexity of the issue lies in ensuring that everybody in a population of 1.2 billion gets a unique number, and therein lies an enormous challenge of scale and technology. But issuing a unique number is just one part of the challenge. The other part is making sure that this number is used effectively. For this purpose, the UIDAI (Unique Identification Authority of India) is providing an online authentication capability. In such a scenario, we will be able to verify online anyone claiming to be Mr. XYZ with the unique number 123 as actually being that person. This combination of de-duplication and having unique numbers on one end, and the existence of online authentication at the other end is the core of the solution that the UIDAI is seeking to achieve.
Now, what is the advantage of this? What does the issuance of a number mean in terms of inclusion? The Aadhaar has several important ramifications, the effects of which will be far-reaching. The first is that an Aadhaar will give a person a recognised identity. It is not that people do not have any identity today, but the number will give identity with respect to the State. For people already having driver licences, passports, bank accounts, credit cards and PAN cards, this probably means little. But there are a few hundred million people in the country who face a lot of challenges in proving their identity. They do not have birth certificates; many of them have not gone to schools and, therefore, they do not have school certificates; and there are 75 million homeless families who do not have an address. Without these documents, and when you do not have an address, you have no real, documentary proof of who you are. This failure to prove one's identity denies many facilities to our citizens. For example, if one wants to get a mobile phone today, then one has to go through what is known as the KYC (know your customer) process. Here, the mobile company will actually check and verify an applicant's identity. But for people who have no such documentary proof of identity, it is very difficult to access a mobile phone connection. Similarly, if somebody goes to a bank to open an account, he is unable to do so unless he goes through the bank's KYC process. This absence of an effective identity infrastructure has also been sharply felt by both government and service providers.
In the last few years, we have had significant increases in our social welfare spending, and we have a large number of initiatives that go towards giving benefits to the poor. However, the effectiveness of these efforts are limited due to the problem of proving identity, and reaching these services across the last mile. This becomes particularly important since we are now in a period of rapid economic growth. Such growth can only be inclusive if people across the country have similar levels of access to the opportunities, 36 Building from the Bottom and resources from economic development. The lack of identity however, again limits many millions from accessing the jobs, the opportunities for education, better financial resources, and the chances for entrepreneurship that emerge out of India's growth.
For a population of over one billion, uniqueness of the biometric data is important. It is only then a unique number can be allocated to each resident. The project would be collecting the biometrics of all 10 fingers, face, as well as the iris image of both eyes. Fingerprint biometrics is being collected to ensure easy biometric authentication-the individual would just have to put their thumb on the biometric reader. Iris is being collected as an additional biometric because it can ensure inclusion of the poor- whose fingerprints often get worn out due to physical labour-and to ensure inclusion of children, whose iris images stabilise even as infants, even though their finger biometrics become stable only at the age of 16. Capturing the iris image also helps ensure the uniqueness of the number, since collecting multiple biometrics lowers the chances of errors.
India is not the first country to link identity with biometrics on a national scale. Many countries around the world are using biometrics as basis for identification of citizens. Brazilian citizens have had user ID cards since the beginning of the 20th century. The decision by the Brazilian government to adopt fingerprint-based biometrics was spearheaded by Dr. Felix Pacheco4 at Rio de Janeiro, at that time capital of the Federative Republic. Dr. Pacheco was a friend of Dr. Juan Vucetich,5 who invented one of the most complete 10-print classification systems in existence. The Vucetich system was adopted not only in Brazil, but also by most of the other South American countries. The oldest and most traditional ID Institute in Brazil (Instituto de Identificação Félix Pacheco) was integrated at DETRAN6-(Brazilian equivalent to DMV) into the civil and criminal AFIS7 system in 1999.
The Benefits of Aadhaar
There are clearly benefits from a mechanism that uniquely identifies a person, and ensures instant identity verification. The need to prove identity only once will bring down transaction costs for the poor. A clear identity number would also transform the delivery of social welfare programmes by making them more inclusive of communities now cut off from such benefits due to their lack of identification. It would enable the government to shift from indirect to direct benefits, and help verify whether the intended beneficiaries actually receive funds/subsidies. A single, universal identity number will also be transformational in eliminating fraud and duplicate identities, since individuals will no longer be able to represent themselves differently to different agencies.
A case in point is banking. To mitigate the lack of financial access in India, the regulator has focused on improving the reach of financial services in new and innovative ways-through no-frills accounts, the liberalization of banking and ATM policies, and branchless banking with business correspondents (BCs), which enables local intermediaries such as self-help groups (SHGs) and kirana stores to provide banking services. Related efforts have also included the promotion of core-banking solutions in Regional Rural Banks (RRBs); and the incorporation of the National Payment Corporation of India (NPCI) to provide a national infrastructure for payments and settlements in the country.
India is not the first country to link identity with biometrics on a national scale. Many countries around the world are using biometrics as basis for identification of citizens. Brazilian citizens have had user ID cards since the beginning of the 20th century. The decision by the Brazilian government to adopt fingerprint-based biometrics was spearheaded by Dr. Felix Pacheco4 at Rio de Janeiro, at that time capital of the Federative Republic. Dr. Pacheco was a friend of Dr. Juan Vucetich,5 who invented one of the most complete 10-print classification systems in existence. The Vucetich system was adopted not only in Brazil, but also by most of the other South American countries. The oldest and most traditional ID Institute in Brazil (Instituto de Identificação Félix Pacheco) was integrated at DETRAN6-(Brazilian equivalent to DMV) into the civil and criminal AFIS7 system in 1999.
The Benefits of Aadhaar
There are clearly benefits from a mechanism that uniquely identifies a person, and ensures instant identity verification. The need to prove identity only once will bring down transaction costs for the poor. A clear identity number would also transform the delivery of social welfare programmes by making them more inclusive of communities now cut off from such benefits due to their lack of identification. It would enable the government to shift from indirect to direct benefits, and help verify whether the intended beneficiaries actually receive funds/subsidies. A single, universal identity number will also be transformational in eliminating fraud and duplicate identities, since individuals will no longer be able to represent themselves differently to different agencies.
A case in point is banking. To mitigate the lack of financial access in India, the regulator has focused on improving the reach of financial services in new and innovative ways-through no-frills accounts, the liberalization of banking and ATM policies, and branchless banking with business correspondents (BCs), which enables local intermediaries such as self-help groups (SHGs) and kirana stores to provide banking services. Related efforts have also included the promotion of core-banking solutions in Regional Rural Banks (RRBs); and the incorporation of the National Payment Corporation of India (NPCI) to provide a national infrastructure for payments and settlements in the country.
Advancements in technology such as core banking, ATMs, and mobile connectivity have also had enormous impact on banking. Mobile phones in particular present an enormous opportunity in spreading financial services across India. These technologies have reduced the need for banks to be physically close to their customers, and banks have been consequently able to experiment with providing services through internet as well as mobile banking. These options, in addition to ATMs, have made banking accessible and affordable for many urban non-poor residents across the country.
With the poor, however, banks face a fundamental challenge that limits the success of technology and banking innovations. The lack of clear identity documentation for the poor creates difficulties in establishing their identity to banks. This has also limited the extent to which online and mobile banking can be leveraged to reach these communities.
Therefore, identity enables firstly, access to a variety of services- including public services, financial access, to banking or other financial products-to almost all services.
The second thing that identity enbles along with online authentication capability, is in providing reach. Reach is very important because if one really wants to promote inclusive growth then we have to reach the number to every corner of the country. Because we have identity authentication being done online, and given the growing connectivity across the country, we can now use the mobile network to authenticate one's identity. This will enable us to reach the millions of people who live in our villages. Even today, for example, only six per cent of our villages have bank branches and therefore there are a large number of people whom we are not able to provide financial services to, simply because we do not have the financial infrastructure to do it. Therefore, giving us the reach to bring such financial and other services to every part of the country, through a combination of networking and UID, will be an important part of inclusion. Whether the person is living in urban Delhi or whether he is living in a remote village in Orissa, he would then be able to use the same set of services.
The next important thing that Aadhaar will enable is mobility. Indians are a very mobile people. Today people leave their villages and travel long distances to get jobs. We know that we have a huge migrant population because economic opportunity is not necessarily available everywhere and therefore people have to travel and uproot themselves and go elsewhere. For the poor, such migration is not easy to do today. For example, today you have a migrant who comes from Chhattisgarh. He has no identity in the city even though he may have some proof back in his village. But, because he does not have that proof in the city, he is not able to get a ration card or open a bank account or get a mobile phone.
However, because Aadhaar is a national number-a number which is portable across the country-it will enable authentication of one's identity regardless of where the person is. People will not lose their services and their support systems when they migrate from their homes. This will in turn, aid mobility-mobility for better jobs, better education and better opportunities.
Intrinsic to this is the whole issue of efficiency in public spending. In its Economic Survey for 2009-10, the finance ministry has acknowledged that "in spite of increased government outlays in the sector in recent years, lack of identity proof results in harassment and denial of basic services to the poor and marginalised. As a result, there are still leakages in the programmes/schemes and benefits do not reach the intended groups of individuals in full.8"
Arguing that ensuring identity proof to the intended beneficiaries was crucial to the success of these schemes, the Survey pointed out that this could be achieved through Aadhaar numbers. "Providing identity proof to the poor through the UIDAI will enable smoother delivery of direct benefits to the underserved. Specifically it will improve the delivery of the flagship schemes of the Centre and will prevent leakages as well as wastages in their implementation," the Survey noted.
We know that due to our growing emphasis on improving welfare for the poor, we are set to spend a lot of money on various social programmes in the coming years. In the last 10 years, we have significantly raised our social spending. This year, the budget for the Natioanl Rural Employment Guarantee Act9 (NREGA) is Rs. 41,000 crore, for Indira Awas Yojana10 (IAY) Rs. 15,000 crore and for Sarva Shiksha Abhiyan11 (SSA) Rs. 15,000 crore. As we have more social programmes, and various rights-right to food, right to education, right to work-get provided for within our welfare schemes we will see spending increase further. This expenditure is ultimately spent on individuals, on beneficiaries. Today, however, because of fundamental problems in confirming the identity of beneficiaries, we have not been successful in reaching benefits to the people who deserve it. The databases are such that there are large numbers of inclusion, as well as exclusion errors. A large number of people are claiming more than their share of public benefits, and there are large numbers of ghosts-people who do not exist but in whose name benefits are being claimed. At the same time, you have millions of deserving people who are not in the system because they do not have any identity. The NCAER (National Council of Applied Economic Research) has estimated for example, that there are over 12 million poor left out from the Targeted Public Distribution System (TPDS).
Reducing these errors and increasing efficiency of public services is a very critical government requirement, especially as we are going to spend more on subsidies for public services. The challenge here is how do we make sure that these benefits reach the right person, and how do we make sure that the truly deserving get the benefit. The Aadhaar will enable us to clearly identify the person receiving a public benefit.
The impact of identifying beneficiaries more effectively would be useful, for instance, within the Public Distribution System or PDS.12 The unique number can share the burden of PDS reform by assisting in the positive identification of individuals and families. This can lead to a high-quality beneficiary database without duplicate and ghost cards, improving the targeting of benefits. Aadhaar will also create an ecosystem for easy implementation of PDS reforms in the long term, like direct benefits transfer. The Aadhaar database can also be used by the PDS system for confirmation of subsidy offtakes by the resident through authentication of the beneficiary's Aadhaar. The efficiency improvements in the PDS system will make it one of the best-run pro-poor schemes in the country. Together, it is a win-win for residents and the Government.
Today, every time an individual tries to access a benefit or service, they must undergo a full cycle of identity verification. Different service providers also often have different requirements in the documents they demand, the forms that require filling out, and the information they collect on the individual. Such duplication of effort and 'identity silos' increase overall costs of identification, and cause extreme inconvenience to the individual. This approach is especially unfair to India's poor and underprivileged residents, who usually lack identity documentation, and find it difficult to meet the costs of multiple verification processes.
Then there is the question of choice. Choice means that I, as a resident of India, should be able to choose who is my service provider for a service. For those in urban India, such choice already exists; if one does not like a mobile company's service, one can buy a mobile service from another vendor. Tomorrow with local number portability, one will also not have to worry about changing one's number. But when it comes to public services, we see that residents lack any choice in the agency from whom they can access the service. If one is on the PDS list, one can only go to one fair price shop. If one has a health record in one's village, one can only visit one ANM (Auxiliary Nurse Mid-Wife) or Asha13 worker to get health services. If there is only one public school in the village, it is the only one that a child can attend. In other words, the poor are denied choice because they have to go to only one provider. When you do not have a choice in public services, then the negotiating power is with your service provider.
Aadhaar will enable people to have a choice; a choice that essentially transfers the negotiating power from the supplier to the customer. This in turn, enables a levelling of opportunity between the rich and the poor. Today we have seen that across India, different people have different levels of opportunity, depending for example, on the state they live in, the community they belong to, and their levels of education. Is there a way with technology to make sure that the rich and the poor, the urban and the rural, the educated and the uneducated all of them have the same access to opportunity, can we level the playing field for them? This is the focus of what the UIDAI is seeking to achieve.
A corollary of this is accountability in government spending. Essentially the audit trails and the financial transaction trails that the number will enable one to figure out where the money is going. This will make expenditure management more transparent, bringing in greater accountability. Aadhaar is fundamental to the way we will deliver public services, fundamental to the way we deliver financial inclusion, fundamental to the way we bring in efficiency of subsidies. If 30 years back, we talked about roti, kapda, aur makaan (food, clothing and shelter) and in the last 10 years we have talked about bijli, sadak, paani, which is infrastructure (power, roads and water), then in the next 10 years, it is going to be about bank accounts, mobile numbers and Aadhaar. All the three are abstract ideas but all of them are tools of empowerment, access, opportunity, and inclusion.
Identity can be the door that will open other doors. Identity enables access to services, like getting a mobile phone or opening a bank account. Identity proof is required to make sure one gets the PDS ration and it is required to get school admission. So, fundamentally an identity enables greater access. As a child, it may be required to get immunisation, as a young student, it is required to get admission or scholarship, as an adult, it is required to get a job. Thus when you look at the whole lifecycle of a person, identity is required at every point.
It is for this reason that we decided to rename the UID as Aadhaar. We wanted a name that had a national appeal, could be recognised across the country and resonate in different languages, besides being easy to remember and say. The 12-digit unique number will be the 'Aadhaar' or foundation through which the citizen can claim his/her rights and entitlements throughout their lifecycle, from a variety of agencies, for a variety of services. We are going to have 800 million people in our workforce by 2020. In order to ensure that they are a source of valuablehuman capital, we must connect them effectively to the services they need in health, education and employment. The number will enable us to implement our long-held vision of 'development with a human face', where people across the country are able to interact with more responsive, accessible institutions and agencies, and where we can move forward on a more inclusive path to growth.
Nandan Nilekani is Chairman, Unique Identification Authority of India (UIDAI)
Select References
1, Castells, Manuel (1997, second edition, 2004). "The Power of Identity", The Information Age: Economy, Society and Culture. Vol. II. Cambridge, MA; Oxford, UK: Blackwell.
2. " India Undertakes Ambitious ID Card Plan," New York Times, 25th June 2009.…Policy makers see a national ID card as critical to improving the delivery of social services, subsidies and other government programs while also strengthening national security. The Indian government and outside observers have shown that the majority of aid earmarked for the poor does not reach them, and it is hard for the government to detect embezzlement and misuse of funds. If administered properly, experts say a universal ID card could help ensure that most of the billions India and other organizations spend on aid reaches the people for whom it was intended. Today, Indians use a variety of documents to prove their identities, like state-issued driver's licenses, ration cards used for food purchases at government-run stores and a tax identification card that is akin to the American Social Security card…http:// www.nytimes.com/2009/06/26/ world/asia/26india.html?_r=1&ref=global-home
3. The Civil Registration System in Denmark, Det Centrale Personregister, http:// www.cpr.dk/cpr/ site.aspx? p=303
4. http://en.wikipedia.org/wiki/Biometrics
5. http://en.wikipedia.org/wiki/Juan_Vucetich. Also see http://en.wikipedia.org/wiki/ Fingerprinting
6. http://www.detran.rj.gov.br/_documento.asp?cod=1438
7. http://en.wikipedia.org/wiki/Automated_fingerprint_identification
8. Economic Survey, 2009-10. Ministry of Finance, Government of India, available at http:// indiabudget.nic.in/es2009-10/esmain.htm
9. The Mahatma Gandhi National Rural Employment Guarantee Act aims at enhancing the livehood security of people in rural areas by guaranteeing 100 days of wageemployment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. More details at http://www.nrega.nic.in/netnrega/home.aspx
10. The objective of IAY is primarily to help construction of dwelling units by members of Scheduled Castes and also Non-Scheduled Castes rural poor living below the poverty line. From the year 1999-2000, it has been decided to earmark 80 per cent to total allocated funds for construction of new houses and 20 per cent funds for upgradation of Kachha unserviceable houses. As per guidelines, tallest 60 per cent of assistance should go in favour of Scheduled Castes beneficiaries under this schemes. More details at http:// bharatnirman.gov.in/housing.html
11. Sarva Shiksha Abhiyan (SSA) is Government of India's flagship programme for achievement of Universalisation of Elementary Education (UEE) in a time-bound manner, as mandated by 86th amendment to the Constitution of India making free and compulsory education to the children of 6-14 years age group, a fundamental right. SSA is being implemented in partnership with state governments to cover the entire country and address the needs of 192 million children in 1.1 million habitations. The programme seeks to open new schools in those habitations which do not have schooling facilities and strengthen existing school infrastructure through provision of additional class rooms, toilets, drinking water, maintenance grant and school improvement grants. More details at http://ssa.nic.in/
12. With a network of more than 400,000 Fair Price Shops (FPS), the Public Distribution System (PDS) in India is perhaps the largest distribution machinery of its type in the world. PDS is said to distribute each year commodities worth more than Rs. 15,000 crore to about 16 crore families. More details at http://fcamin.nic.in/dfpd/ EventListing.asp?Section=PDS&id_pk=1&ParentID=0
13. One of the key strategies under the National Rural Health Mission (NRHM) is having a Community Health Worker i.e. ASHA (Accredited Social Health Activist)-a trained female community health specialist-for every village with a population of 1000. Selected from the village itself and accountable to it, the ASHA will be trained to work as an interface between the community and the public health system. More details at http://mohfw.nic.in/NRHM.htm
With the poor, however, banks face a fundamental challenge that limits the success of technology and banking innovations. The lack of clear identity documentation for the poor creates difficulties in establishing their identity to banks. This has also limited the extent to which online and mobile banking can be leveraged to reach these communities.
Therefore, identity enables firstly, access to a variety of services- including public services, financial access, to banking or other financial products-to almost all services.
The second thing that identity enbles along with online authentication capability, is in providing reach. Reach is very important because if one really wants to promote inclusive growth then we have to reach the number to every corner of the country. Because we have identity authentication being done online, and given the growing connectivity across the country, we can now use the mobile network to authenticate one's identity. This will enable us to reach the millions of people who live in our villages. Even today, for example, only six per cent of our villages have bank branches and therefore there are a large number of people whom we are not able to provide financial services to, simply because we do not have the financial infrastructure to do it. Therefore, giving us the reach to bring such financial and other services to every part of the country, through a combination of networking and UID, will be an important part of inclusion. Whether the person is living in urban Delhi or whether he is living in a remote village in Orissa, he would then be able to use the same set of services.
The next important thing that Aadhaar will enable is mobility. Indians are a very mobile people. Today people leave their villages and travel long distances to get jobs. We know that we have a huge migrant population because economic opportunity is not necessarily available everywhere and therefore people have to travel and uproot themselves and go elsewhere. For the poor, such migration is not easy to do today. For example, today you have a migrant who comes from Chhattisgarh. He has no identity in the city even though he may have some proof back in his village. But, because he does not have that proof in the city, he is not able to get a ration card or open a bank account or get a mobile phone.
However, because Aadhaar is a national number-a number which is portable across the country-it will enable authentication of one's identity regardless of where the person is. People will not lose their services and their support systems when they migrate from their homes. This will in turn, aid mobility-mobility for better jobs, better education and better opportunities.
Intrinsic to this is the whole issue of efficiency in public spending. In its Economic Survey for 2009-10, the finance ministry has acknowledged that "in spite of increased government outlays in the sector in recent years, lack of identity proof results in harassment and denial of basic services to the poor and marginalised. As a result, there are still leakages in the programmes/schemes and benefits do not reach the intended groups of individuals in full.8"
Arguing that ensuring identity proof to the intended beneficiaries was crucial to the success of these schemes, the Survey pointed out that this could be achieved through Aadhaar numbers. "Providing identity proof to the poor through the UIDAI will enable smoother delivery of direct benefits to the underserved. Specifically it will improve the delivery of the flagship schemes of the Centre and will prevent leakages as well as wastages in their implementation," the Survey noted.
We know that due to our growing emphasis on improving welfare for the poor, we are set to spend a lot of money on various social programmes in the coming years. In the last 10 years, we have significantly raised our social spending. This year, the budget for the Natioanl Rural Employment Guarantee Act9 (NREGA) is Rs. 41,000 crore, for Indira Awas Yojana10 (IAY) Rs. 15,000 crore and for Sarva Shiksha Abhiyan11 (SSA) Rs. 15,000 crore. As we have more social programmes, and various rights-right to food, right to education, right to work-get provided for within our welfare schemes we will see spending increase further. This expenditure is ultimately spent on individuals, on beneficiaries. Today, however, because of fundamental problems in confirming the identity of beneficiaries, we have not been successful in reaching benefits to the people who deserve it. The databases are such that there are large numbers of inclusion, as well as exclusion errors. A large number of people are claiming more than their share of public benefits, and there are large numbers of ghosts-people who do not exist but in whose name benefits are being claimed. At the same time, you have millions of deserving people who are not in the system because they do not have any identity. The NCAER (National Council of Applied Economic Research) has estimated for example, that there are over 12 million poor left out from the Targeted Public Distribution System (TPDS).
Reducing these errors and increasing efficiency of public services is a very critical government requirement, especially as we are going to spend more on subsidies for public services. The challenge here is how do we make sure that these benefits reach the right person, and how do we make sure that the truly deserving get the benefit. The Aadhaar will enable us to clearly identify the person receiving a public benefit.
The impact of identifying beneficiaries more effectively would be useful, for instance, within the Public Distribution System or PDS.12 The unique number can share the burden of PDS reform by assisting in the positive identification of individuals and families. This can lead to a high-quality beneficiary database without duplicate and ghost cards, improving the targeting of benefits. Aadhaar will also create an ecosystem for easy implementation of PDS reforms in the long term, like direct benefits transfer. The Aadhaar database can also be used by the PDS system for confirmation of subsidy offtakes by the resident through authentication of the beneficiary's Aadhaar. The efficiency improvements in the PDS system will make it one of the best-run pro-poor schemes in the country. Together, it is a win-win for residents and the Government.
Today, every time an individual tries to access a benefit or service, they must undergo a full cycle of identity verification. Different service providers also often have different requirements in the documents they demand, the forms that require filling out, and the information they collect on the individual. Such duplication of effort and 'identity silos' increase overall costs of identification, and cause extreme inconvenience to the individual. This approach is especially unfair to India's poor and underprivileged residents, who usually lack identity documentation, and find it difficult to meet the costs of multiple verification processes.
Then there is the question of choice. Choice means that I, as a resident of India, should be able to choose who is my service provider for a service. For those in urban India, such choice already exists; if one does not like a mobile company's service, one can buy a mobile service from another vendor. Tomorrow with local number portability, one will also not have to worry about changing one's number. But when it comes to public services, we see that residents lack any choice in the agency from whom they can access the service. If one is on the PDS list, one can only go to one fair price shop. If one has a health record in one's village, one can only visit one ANM (Auxiliary Nurse Mid-Wife) or Asha13 worker to get health services. If there is only one public school in the village, it is the only one that a child can attend. In other words, the poor are denied choice because they have to go to only one provider. When you do not have a choice in public services, then the negotiating power is with your service provider.
Aadhaar will enable people to have a choice; a choice that essentially transfers the negotiating power from the supplier to the customer. This in turn, enables a levelling of opportunity between the rich and the poor. Today we have seen that across India, different people have different levels of opportunity, depending for example, on the state they live in, the community they belong to, and their levels of education. Is there a way with technology to make sure that the rich and the poor, the urban and the rural, the educated and the uneducated all of them have the same access to opportunity, can we level the playing field for them? This is the focus of what the UIDAI is seeking to achieve.
A corollary of this is accountability in government spending. Essentially the audit trails and the financial transaction trails that the number will enable one to figure out where the money is going. This will make expenditure management more transparent, bringing in greater accountability. Aadhaar is fundamental to the way we will deliver public services, fundamental to the way we deliver financial inclusion, fundamental to the way we bring in efficiency of subsidies. If 30 years back, we talked about roti, kapda, aur makaan (food, clothing and shelter) and in the last 10 years we have talked about bijli, sadak, paani, which is infrastructure (power, roads and water), then in the next 10 years, it is going to be about bank accounts, mobile numbers and Aadhaar. All the three are abstract ideas but all of them are tools of empowerment, access, opportunity, and inclusion.
Identity can be the door that will open other doors. Identity enables access to services, like getting a mobile phone or opening a bank account. Identity proof is required to make sure one gets the PDS ration and it is required to get school admission. So, fundamentally an identity enables greater access. As a child, it may be required to get immunisation, as a young student, it is required to get admission or scholarship, as an adult, it is required to get a job. Thus when you look at the whole lifecycle of a person, identity is required at every point.
It is for this reason that we decided to rename the UID as Aadhaar. We wanted a name that had a national appeal, could be recognised across the country and resonate in different languages, besides being easy to remember and say. The 12-digit unique number will be the 'Aadhaar' or foundation through which the citizen can claim his/her rights and entitlements throughout their lifecycle, from a variety of agencies, for a variety of services. We are going to have 800 million people in our workforce by 2020. In order to ensure that they are a source of valuablehuman capital, we must connect them effectively to the services they need in health, education and employment. The number will enable us to implement our long-held vision of 'development with a human face', where people across the country are able to interact with more responsive, accessible institutions and agencies, and where we can move forward on a more inclusive path to growth.
Nandan Nilekani is Chairman, Unique Identification Authority of India (UIDAI)
Select References
1, Castells, Manuel (1997, second edition, 2004). "The Power of Identity", The Information Age: Economy, Society and Culture. Vol. II. Cambridge, MA; Oxford, UK: Blackwell.
2. " India Undertakes Ambitious ID Card Plan," New York Times, 25th June 2009.…Policy makers see a national ID card as critical to improving the delivery of social services, subsidies and other government programs while also strengthening national security. The Indian government and outside observers have shown that the majority of aid earmarked for the poor does not reach them, and it is hard for the government to detect embezzlement and misuse of funds. If administered properly, experts say a universal ID card could help ensure that most of the billions India and other organizations spend on aid reaches the people for whom it was intended. Today, Indians use a variety of documents to prove their identities, like state-issued driver's licenses, ration cards used for food purchases at government-run stores and a tax identification card that is akin to the American Social Security card…http:// www.nytimes.com/2009/06/26/ world/asia/26india.html?_r=1&ref=global-home
3. The Civil Registration System in Denmark, Det Centrale Personregister, http:// www.cpr.dk/cpr/ site.aspx? p=303
4. http://en.wikipedia.org/wiki/Biometrics
5. http://en.wikipedia.org/wiki/Juan_Vucetich. Also see http://en.wikipedia.org/wiki/ Fingerprinting
6. http://www.detran.rj.gov.br/_documento.asp?cod=1438
7. http://en.wikipedia.org/wiki/Automated_fingerprint_identification
8. Economic Survey, 2009-10. Ministry of Finance, Government of India, available at http:// indiabudget.nic.in/es2009-10/esmain.htm
9. The Mahatma Gandhi National Rural Employment Guarantee Act aims at enhancing the livehood security of people in rural areas by guaranteeing 100 days of wageemployment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. More details at http://www.nrega.nic.in/netnrega/home.aspx
10. The objective of IAY is primarily to help construction of dwelling units by members of Scheduled Castes and also Non-Scheduled Castes rural poor living below the poverty line. From the year 1999-2000, it has been decided to earmark 80 per cent to total allocated funds for construction of new houses and 20 per cent funds for upgradation of Kachha unserviceable houses. As per guidelines, tallest 60 per cent of assistance should go in favour of Scheduled Castes beneficiaries under this schemes. More details at http:// bharatnirman.gov.in/housing.html
11. Sarva Shiksha Abhiyan (SSA) is Government of India's flagship programme for achievement of Universalisation of Elementary Education (UEE) in a time-bound manner, as mandated by 86th amendment to the Constitution of India making free and compulsory education to the children of 6-14 years age group, a fundamental right. SSA is being implemented in partnership with state governments to cover the entire country and address the needs of 192 million children in 1.1 million habitations. The programme seeks to open new schools in those habitations which do not have schooling facilities and strengthen existing school infrastructure through provision of additional class rooms, toilets, drinking water, maintenance grant and school improvement grants. More details at http://ssa.nic.in/
12. With a network of more than 400,000 Fair Price Shops (FPS), the Public Distribution System (PDS) in India is perhaps the largest distribution machinery of its type in the world. PDS is said to distribute each year commodities worth more than Rs. 15,000 crore to about 16 crore families. More details at http://fcamin.nic.in/dfpd/ EventListing.asp?Section=PDS&id_pk=1&ParentID=0
13. One of the key strategies under the National Rural Health Mission (NRHM) is having a Community Health Worker i.e. ASHA (Accredited Social Health Activist)-a trained female community health specialist-for every village with a population of 1000. Selected from the village itself and accountable to it, the ASHA will be trained to work as an interface between the community and the public health system. More details at http://mohfw.nic.in/NRHM.htm
