Aadhaar number is a 12-digit random number issued by the UIDAI Authority under Aadhaar Act to the residents of India after satisfying the verification process laid down by the Authority. Any individual, irrespective of age and gender, who is a resident of India, may voluntarily enrol to obtain Aadhaar number. There are now 1.24 billion Aadhaar numbers in India, covering approximately 98% of the country’s population (using 2011 Census projections).

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Evolution of Aadhaar in India:

Aadhaar and welfare delivery:

• In 2016, the government mandated its use in welfare programme delivery.
• Proponents argue that Aadhaar, by providing a unique identity and allowing biometric authentication, delivers the gains to actual beneficiaries, instead of fake or duplicates, thereby cutting leakages.
• The expansion in reach has enabled Aadhaar to become an integral component of several flagship government programmes.
• This includes the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the public distribution system (PDS), two of India’s largest welfare programmes where nearly 90% of beneficiaries are linked to Aadhaar (Aadhaar-seeded).
• Jan-dhan accounts, which are Aadhaar-seeded, are now being used for programme delivery via direct benefit transfer (DBT) and are part of the much-vaunted JAM (Jan Dhan-Aadhaar-Mobile) trinity.
• The 2014-15 Economic Survey heralded JAM as a potential game changer because DBT through JAM can circumvent corrupt intermediaries and reduce market distortions.
• Over the last two years, DBT has significantly picked up. In 2018-19, ?2 trillion (around 8% of total government expenditure) was delivered through DBT into beneficiary accounts according to the DBT Mission. Within this, transfers for MGNREGS and PAHAL (the LPG subsidy) are the largest components.
• The DBT Mission estimates that Aadhaar and DBT have helped save the government around ?1.2 trillion since 2014.

Concerns:

• Global impacts not considered:
  • The PAHAL savings estimate (?56,000 crore) does not account for a slump in global oil prices since 2014. The bigger problem, though, is the lack of clarity about the source of Aadhaar-related savings.
• Inclusion-Exclusion errors:
  • The government claims that Aadhaar has generated savings by eliminating duplicate and fake beneficiaries. However, savings could simply be a result of Aadhaar excluding genuine beneficiaries.
  • In a 2017 study published in the Economic and Political Weekly, economist Jean Dreze and others pointed out that Aadhaar-based authentication in Jharkhand’s PDS has led to serious exclusion problems and prevented vulnerable groups, such as widows and the elderly, from accessing their entitlements.
  • State of Aadhaar Report 2017-18, IDinsight, a development consultancy, uses survey data from Andhra Pradesh, Rajasthan and West Bengal to estimate that around two million individuals every month are excluded from the PDS because of Aadhaar-related reasons.
• Privacy and Security concerns:
  • Most developed countries have already dropped the idea of having Aadhaar-like identification system to protect people’s privacy.
  • Even the US, one of the first countries in the world to have a national identification number for its citizens, does not collect fingerprints or scan iris to create social security number (SSN)
  • Unlike India, the US has a privacy law that makes it unlawful for government agencies to deny benefits just because the individual refuses to disclose his SSN.
• Systemic corruption still persists:
  • Aadhaar-based authentication increases transaction costs, including time spent collecting grains, and did little to decrease corruption in the PDS
• Technical flaws:
  • Aadhaar-related reasons tend to be failures in biometric authentication (for example, fingerprints not being recognized) and connectivity issues, which are particularly acute in rural areas.
  • Given these problems, the shift to Aadhaar-based authentication in the PDS has not enjoyed universal support. For instance, in Andhra Pradesh only 55% of beneficiaries’ preferred Aadhaar authentication in the PDS, while in Rajasthan the figure was 67%.

Way forward:

Policy measures:

• Government should assure the citizens that it has the technology and systems to protect the data collected.
• It should assure the citizens of India that it will do everything possible to prevent unauthorised disclosure of or access to such data.
• It should recognise all dimensions of the right to privacy and address concerns about data safety, protection from unauthorised interception, surveillance, use of personal identifiers and bodily privacy.
• Supreme Court’s recent judgement in the Aadhaar case makes Aadhaar mandatory for availing facilities of welfare schemes and government subsidies as it empowers the poor and marginalised.
• An independent and participatory review of the system is long overdue
• A data protection law with strong protective provisions is need of the hour.

Technological measures:

• Designating UID databases as “critical infrastructure”.
• Crafting an encryption policy that specifically addresses encryption for Aadhaar-enabled apps. ? Security testing of all Aadhaar-enabled applications.
• Encouraging device-level encryption for mobile phones and laptop computers.
• Creating a Computer Emergency Response Team to monitor attacks on Aadhaar.
• Working with the private sector at forums like the International Electronic and Electrical Engineers (IEEE) and the Internet Engineering Task Force to create interoperable security standards for platforms relying on national identity databases.

Conclusion:

Policymakers should focus more on beneficiary experience and the context in which programmes operate in. This, more than fiscal savings, should inform how Aadhaar is deployed to improve programme delivery.