12 DEC, 2011, 07.19AM IST, PRANAV NAMBIAR,TNN
BANGALORE: With the Parliamentary Standing Committee on Finance raising a red flag against the National Identification Authority of India ( NIAI) Bill to grant the UID (or Aadhar) project legal status, the project looks set for a slowdown. That could have broad implications for the tech sector that had laid substantial hope on it, especially when global markets are slowing down.
The UID project is estimated to offer IT companies a Rs 15,000-Rs 20,000-crore opportunity. This includes building an ecosystem around the project, comprising biometrics, databases, smartcards, storage and system integration.
Since the UIDAI implements an open-system, plugand-play approach, entrepreneurs and startups can develop applications in numerous areas. Some of the applications of Aadhar is seen in areas such as food distribution, financial inclusion, and know-your-customer services.
The parliamentary committee has said that the project might be too expensive and duplicates the National Population Register's (NPR) efforts to collect biometric and other data for the national census. Some have also called for a change of collection of data from biometric data, which they consider insecure for smart cards (as fraudsters can take your fingerprints from objects that you touch). The Cabinet need not accept the committee's recommendations.
Thus it is unclear if the UID project will be scrapped, watered down or persisted with in its current form. Some contracts have been granted to tech majors. According to the said current contracts are not significantly large in size and their cancellation will not make a big dent in the companies' books. He added that scrapping of project from a longer term perspective could be a negative.
Government public services initiatives like public distribution system UIDAI website, Wipro in March 2011 won a contract to supply, install, and commission hardware and software for data centres at Bangalore and NCR. MindTree in April 2010 won a contract for application software development, maintenance and support. TCS, Accenture, HP, Satyam, Intelenet Global, HCL Infosystems, Geodesic are some others that have won contracts.
Ankur Rudra, IT sector analyst at Ambit Capital, (PDS) and e-governance schemes are expected to spark off more projects requiring technology enablement.
Sunil Abraham, ED of the Centre for Internet and Society, said if changes are incorporated to the Bill, it would not necessarily be anti-technology. The organization had raised concerns about security issues around biometric data. "There might be a change in the design of the UID project, but technology will remain a critical element," he added.
Siddharth Pai, MD of global sourcing advisory firm Technology Partners International (TPI) India, said that the UID project is a very critical infrastructure from a national perspective and chances of the project being scrapped are little.
He added that tech companies might experience delay in government spends and see a delay in project execution. This may lead to delays in revenue yields. IT company officials also acknowledge that there could be delays in projects which could increase costs for them. None wanted to be quoted on this issue.
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Ram (Sydney)
12 Dec, 2011 05:51 PM
" That could have broad implications for the tech sector that had laid substantial hope on it, especially when global markets are slowing down. " "The UID project is estimated to offer IT companies a Rs.15,000 - Rs 20,000-crore opportunity."
GFC began in July 2007 long before Nandan Nilekani published his Idea in Conflict - The UID, in Imagining India and sold the Idea to UPA II. More like Rs 20,000 crores of Tax Payers money being used to prop up NASSCOM members facing financial downturn due to GFC. UID is a "Big White Elephant." UID has had no feasibility studies, no cost benefit analysis, no Public or Parliamentary debate, built on unreliable technologies, invades privacy, touts financial inclusion of the Poor, yet focuses on Middle class in metros, has flaws in implementation process which will allow criminals and aliens to create new identities for themselves, all for a mere Rs 100 as payment to some unknown introducer ... Even RBI has advised banks to do their won KYC as Aadhaar is not good enough. I do not believe Nandan Nilekani and his team at Infosys would have handled any "BIG" customer in such a shoddy way. GOI deserves better and so do the people of India. Nandan Nilekani has no one to blame but himself for trying to convert a simple good intention into a national policy without doing any home work. The whole project is akin to pyramid marketing with a lot of hype but little substance.