Regulatory change must walk in step
Business Standard, New Delhi
December 02, 2010, 0:24 IST
Now that the unique identity (UID) or Aadhaar rollout has started and is slated to gather steam, a few key decisions need to be taken to derive the best advantage from the technological feat that the project represents. One is to make the UID number adequate proof of identity for the purpose of accessing basic financial services like opening a bank account. The other is to protect the privacy of individuals which can be threatened by wrongful use of the humongous amount of data that the project will collect. The UID authorities are already discussing the former with the banking regulator, the Reserve Bank of India, and the Union finance ministry but it needs to be emphasised that this should be allowed and soon. Currently, banks mostly accept a new customer when she is introduced by an existing customer. It is easy to see how this does not take financial inclusion forward. The problem of getting an introduction gets more acute in the case of a migrant labourer. The best way to ensure that wages get to the right beneficiaries and are not siphoned off by intermediaries is to credit them to the labourer's bank accounts. This is particularly so in the case of social security payments made under programmes like the one for rural employment. Any qualms that banks may have on relying on an outside agency to get to know a large number of their customers can be addressed by the fact that the UID authority is an official agency which is likely to have the best available means of verifying and cross-checking identities.
On the issue of protection of individual privacy, action is long overdue. Nandan Nilekani, the IT leader who heads the UID Authority, has been acknowledging from day one the need for the government to determine a privacy framework for Indians. A proposed law is to have provisions to protect the personal data being collected by the authority from misuse. But while Mr Nilekani has gone ahead with his setup to do his job and meet his targets, protection of privacy is still awaited. The unaccountability that exists in regard to privacy is highlighted by the ease with which the Niira Radia telephone tapes have found their way into the public domain. Few believe that the source of the leak or any corporate rivalry lying at the root of it will be identified. Just as in every government setup there is an information officer under the RTI Act, there is a need to identify information security officers in the UID setup and elsewhere, in whose safe keeping officially collected information will remain. It is widely felt that tax and security officials readily get information without always having to produce a formal authorisation. The conditions for inter-departmental access to the information with the identity authority need to be clearly spelt out. The UID project will be belittled if the prowess of IT and management efficiency end up playing a role in enabling a Big Brother state to undermine legitimate individual privacy. An initiative aimed at empowering the ordinary citizen should not end up just empowering the state.
