Great Expectations: The Immense Potential and Challenges of Aadhaar
By Sasi Desai, Nipun Jasuja, and Piyush Khandekar
(The authors are graduate students at the Wharton School and affiliated with the Wharton India Economic Forum and Wharton FinTech. Their earlier articles about Aadhaar can be found here and here. The views expressed are personal.)
Life is bleak for Neeta, a 35 year-old woman living with her five children. When her husband died two years back, she became the primary breadwinner for the family, working as a maid in three houses and earning Rs. 8,000 per month. With no health insurance or savings, the family situation is precarious. If she were to fall ill, even for a couple of days, her children would have to leave school and start working.
And that’s not all. Neeta relies on her 16-year old son Varun to skip school and navigate the lines and bureaucracy to collect her widow pension, LPG (cooking gas) subsidy and PDS (government subsidized food and non-food items) ration. For the last few months, however, Varun has not been given the widow pension, as someone has misappropriated his mother’s identity and has been collecting what rightfully belongs to his mother. To make up for this loss of income, and to pay Varun’s coaching class fees, Neeta pawns her wedding jewelry at an egregious interest rate. Life just went from bleak to bleaker.
320 million people in India live like Neeta, with household incomes of under Rs. 10,000 per month. This is even more mind boggling, since India as a country has the third highest number of billionaires in the world. The lack of financial, social, and literary inclusion is stalling equitable growth and preventing India from unleashing the full power of its hopeful yet struggling population.
Aadhaar has the potential to transform these lives. As the world’s largest biometrics program, the Aadhaar platform is turning out to be a powerful driver of inclusion. Through Aadhaar, Neeta can open a Jan Dhan bank account, and verify her identity to collect her widow pension. Varun does not have to miss school to ensure that his mother receives LPG and PDS benefits and can dream of a college education and an office job. Instead of pawning her jewelry, banks can now offer Neeta short term micro-loans at reasonable interest rates.
In recent months, much buzz can be read or heard about the perils of Aadhaar. One must be grateful to the critics, for they help identify loopholes and force innovators to strive for perfection. The criticism is also understandable. Fear of innovation is as old as time itself. In the 15th century, books were criticized for spreading heretic thoughts. Books! Socrates shunned writing, fearing it would impair memory. Radio was a tool for government propaganda. Movies compromised our morals.
While innovation is always initially scary, societies ultimately overcome their fears, embrace new technologies, and become stronger. Aadhaar is on a similar path. As the bedrock of India’s digital economy, it is empowering and unleashing the potential of both urban and non-urban India.
Much like any other innovation, however, Aadhaar is no silver bullet. Several valid concerns exist, and we discuss how they can be addressed below.
The first concern is related to privacy and the lack of a grievance mechanism for individuals in case of a privacy breach. This concern is valid for any system that stores sensitive personal information. The Supreme Court’s landmark judgement on right to privacy as a fundamental right is a step in the right direction. Whether Aadhaar adheres to the design principles laid down by the court is still under review. While the creators of Aadhaar are confident it will pass with flying colors, even if opportunities for improvement are discovered, they will only make the unique ID ecosystem in our country more secure.
The second concern is that biometrics cause exclusion . There is legitimate fear that people may be denied benefits due to authentication errors. This is also linked to the debate around Aadhaar being mandatory. Implementation of a new technology is never perfect. System design has improved over time, and manual processes have been put in place. On the mandatory debate, while there is a rightful push for Aadhaar as the preferred form of identity, it should be the responsibility of the state that no one is denied their due from the government.
The third concern is around security of the UID database. As the recent cyber-attacks (such as Equifax and Wannacry) have shown, security concerns transcend the Aadhaar universe. In a digitally connected world, hacking is a constant threat. We need stronger security protocols to manage sensitive data. Ironically, just as our parents often set passwords as their date of birth or Neeta writes her M-Pin on a piece of paper, the weakest part of any IT infrastructure is the end user itself. In saying this, we are not taking responsibility away from authorities to protect our sensitive information that is owned by them. While these entities should continue to strive for the highest standards of security, an equal emphasis should also be placed on improving transparency and educating people on what’s at risk in a digital world. This challenge becomes even more daunting as electronic identification-based services are provided to people at the bottom of the pyramid, with low levels of digital literacy and awareness.
The fourth concern is the imitation, or leak, of biometric data. Unlike the countless password resets, Neeta only has 10 fingerprints and two iris scans. We need checks and balances to make sure her biological identity is not lost for good. The provision in Aadhaar to ‘lock’ your biometrics to prevent unauthorized use is a good start. However, all sensitive systems (at least for now) should use both biometric and password / PIN based authentication.
The fifth concern is the variability and ambiguity of the process across states for invalidating Aadhaar credentials of the deceased. This is an opportunity (rather than a threat) to determine best practices and enforce them nationally.
The list of concerns goes on. The good news is that the major concerns are addressable. The not-so-good-news is that it is hard to make critics believe in the philosophy of “learning while doing” when people’s identity is at stake.
Do we continue to unleash the potential of Aadhaar? Or do we stall the progress made thus far and leave behind millions of Indians like Neeta and Varun?
Continuing with status quo is not an option. Aadhaar is a rare instance where people on both sides are aligned on the ultimate goal — financial inclusion and a developed, digital India. Let us seize this opportunity and change the atmosphere around Aadhaar from one of fear to one of trust and optimism. Let us continue to be critical of our flaws, but let us use the critique to drive innovation, not stall progress.
