That Aadhaar is a useful tool cannot be denied. It is heartening to record public acceptance of the scheme.
However, security is one area where the air must be cleared beyond doubt.
Even as lawyers and activists continue their tirade against it, and the Supreme Court mulls the various contentions surrounding it before arriving at a verdict, Aadhaar has steadily gone on to permeate the country’s territory, population, economy and indeed, its consciousness. Increasingly, for Indians, Aadhaar is becoming a way of life, and what’s more, they are happy with it, going by the findings of The State of Aadhaar Report 2017-18.
This is a survey-based report prepared by international data analysis firm, IDinsights, and sponsored by an organisation no less than the philanthropic investment firm, Omidyar Network. The idea was to understand the user experience and perception related to Aadhaar.
But first, the extent of its geographical coverage: figures from the Unique Identification Authority of India (UIDAI) website give the saturation of Aadhaar across the country (See the table).
Save for Assam and Meghalaya, populations of most other states stand at comfortable levels, either mostly covered by this biometric identification card, or in the process of being covered thereof. The saturation for the country as a whole is 88.5 per cent. Assam’s problem is its illegal immigrants from Bangladesh and the state has asked for time as it first corrects its National Register of Citizens (NRC) records to identify original inhabitants. Ditto for Meghalaya, with other added political constraints thrown in. Even Jammu and Kashmir has a saturation of 73.1 per cent as of May 2018. (Please note that these figures are live, and hence, show monthly increase)
This is as far as the extent of Aadhaar’s spread goes. Now, for the impact.
The State of Aadhaar Report 2017-18 (SOA) brought out several facts that show Aadhaar’s gaining popularity. According to the findings of the report, “a majority of Indians value privacy, but also approve of linking Aadhaar to services”. Close to 3,000 households were interviewed in person, and as many as 87 per cent rural residents approved of the mandatory linking of Aadhaar because it prevents identity fraud. The survey took estimates from three representative states of Andhra Pradesh, Rajasthan and West Bengal – chosen because of their geographical distribution across India and also because they represented diverse contexts of culture and state capacity, Aadhaar enrolment and linkages to services.
Aadhaar For What?
Given that the whole purpose was targeted at timely disbursal of subsidies – the Aadhaar Act 2016 is in fact, Aadhaar (targeted delivery of financial and other subsidies, benefits and services) Act, aimed at avoiding leakages, and to ensure subsidies reach the intended beneficiary. Though not mandatory for anyone to possess one, it makes life simpler to have a unique identification number linked with schemes, scholarships, bank accounts and so on.
The Government of India’s Direct Benefit Transfer website lists out a total of 434 “onboarded schemes” from 56 ministries, which include: scholarships and fellowships; schemes related to agriculture, farmers, dairying and animal husbandry; fertilisers; food and public distribution; health and family welfare; schemes for ex-servicemen and those with disabilities; pension and other financial schemes; schemes relating to social justice and empowerment, rural employment, LPG, kerosene, for women, and so on.
On the website, there is a specific page on “Aadhaar-enabled services”, under which are listed “35 services from 17 ministries”. And, interestingly – though Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, PAN and mobile telephone connections are listed as part of the 35 services – LPG, Public Distribution System (PDS), and pension schemes are not part of Aadhaar-enabled services. The website clearly states elsewhere, that “Aadhaar is not mandatory in DBT schemes. Since Aadhaar provides unique identity and is useful in targeting the intended beneficiaries, Aadhaar is preferred and beneficiaries are encouraged to have Aadhaar.”
As An Aside (Busting A Myth)
Another important takeaway from the DBT website is that, contrary to popular understanding, the government is not claiming to have saved all those 90,000 crores of rupees only because of the Aadhaar initiative. In fact, the DBT website clearly tabulates estimated savings against schemes like PDS, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), National Social Assistance Programme (NSAP) and LPG and attributes them to DBT and other governance reforms, which “have led to removal of duplicate/fake beneficiaries and plugging of leakages etc, as a result of which the government has been able to target the genuine and deserving beneficiaries.”
Against each scheme is also given the exact number of duplicate/fake/non-existent beneficiaries/ration cards that were deleted.
Aadhaar – Nice To Have
Thus, for now, it appears that an Aadhaar is more ‘nice to have’, rather than ‘need to have’. Logic tells us then, that the above being the case, the exclusions that have been allegedly happening in the case of food subsidies, pensions and other schemes are more a function of inadequate understanding about Aadhaar on the part of distribution functionaries or vendors. The government has also consistently been issuing clarifications and notices to the effect that no one need be denied services for lack of Aadhaar, and that other identification measures will work. This is also in line with the SOA 2018-19 finding that exclusion in schemes such as PDS was more due to other factors rather than because of Aadhaar: Rajasthan’s figures, for instance, stood at 6.5 per cent and 0.2 per cent respectively.
Nevertheless, as enrolment increases, the proportion of beneficiaries for subsidies has been increasing (see the chart below) too, according to the State of Aadhaar Report 2017-18.
What It Will Take For Aadhaar, Specifically, To Take Off
Without doubt, financial inclusion. When all Aadhaar cards are linked with bank accounts, all leakages can be avoided. And hence, the government’s insistence on linking the two. Currently, despite the gains made by the PMJDY for opening bank accounts, the banking system is constrained by its reach, and many more branches of banks need to be opened in rural areas.
Does Aadhaar help people open bank accounts and use them? This question is sought to be answered in the SOA report, and the answer does seem to be a ‘yes’. Aadhaar serves as the foundational layer for use of microATMs through the Aadhaar Enabled Payment System (AEPS) and two, DBTs can be paid using an Aadhaar-based infrastructure known as Aadhaar Payment Bridge System (APBS).
As seen in the figure below, the value of transactions made over APBS has almost doubled in 2017-18 compared with a year ago. Data from National Payments Corporation of India (NPCI) demonstrates an almost tenfold increase in the value of transactions conducted using AEPS in 2017-18, compared with the previous year.
Aadhaar usage and the transfer of money could actually incentivise people to use bank accounts. Here, the SOA recommends the use of microATMS, based on their data analysis, to enhance the reach of financial services. This will need to address issues regarding business correspondent networks. As a policy tool, Aadhaar-seeded bank accounts could be policy tools to encourage bank account usage – and this needs looking into, as per the report.
On its part, the UIDAI has been stressing on post offices and bank branches to offer Aadhaar cards to people. Other suggestions that have been thrown up are to allow post offices to open banks, given their huge numbers, across the country.
Privacy And Data Protection
Privacy and data protection laws are important. The SOA also emphasises this approach – rather than to discard Aadhaar itself, which is akin to throwing the baby out with the bath water. As former chairman of the UIDAI, Nandan Nilekani, points out, “privacy breaches are far greater through mobile phones and other sources than through a biometric identification card.”
UIDAI’s proactive, pre-emptive and persuasive efforts in making the Aadhaar card a success have been laudable, as also immediate redressal of issues as they come up. In fact, a heartening part of the SOA report is a section on the ‘Evolving Features of Aadhaar’, which talks about the features added to address growing concerns about privacy and data security: Virtual ID (VID), Limited KYC, and UID token. Very briefly, the VID, a temporary 16-digit random number, prevents agencies from linking databases using Aadhaar’s unique identifier since each agency will only have access to the temporary VID, and also, it allows an individual to have a choice about when they share their Aadhaar number.
Limited know-your-customer (KYC) is being introduced to certain agencies that are allowed to store Aadhaar numbers upon authentication. The UID Token will work for each individual Aadhaar number for each transaction with an agency, but not used anywhere beyond that agency. This too prevents different agencies from linking databases as each agency has a unique token.
Of course, these measures also need careful testing in order to make sure they indeed provide protection. Efforts to advance and evolve security features to better protect residents should be encouraged. Finally, the report suggests the government should engage in thoughtful campaigns in order to promote uptake of Aadhaar.
Given all of the above, it does seem as though, soon, it will be difficult to remember how life was before Aadhaar.