Saturday, March 5, 2011

146 - Aadhaar: Bonanza for corporates, no-win situation for the people by Samir Kelekar _ Source - MoneyLife

Aadhaar: Bonanza for corporates, no-win situation for the people - A Money Life Article
August 02, 2010 05:37 PM | 
Samir Kelekar

Aadhaar could be extremely dangerous to freedom and democracy itself, a reason why similar identity projects have been confined to the dustbin by many other democratic countries

Since Aadhaar, that national UID project, seems to be the flavour of the season with news coming out everyday as to how it is turning out to be a bonanza for corporates, and now even the Supreme Court joining in on the Aadhaar bandwagon, I thought, why not pen another article.

To summarise, whichever way one looks at it, I find that Aadhaar is either an idea conceived very naively or it is a fast one pulled on the hapless people of India. Let me elaborate why.

Firstly, any security architect knows that the probability of any computer system getting hacked can never be zero. There is no such thing as 100% security.

Safeguards and backup plans are built into systems for such an eventuality even while taking care that the systems are made as secure as possible. Aadhaar is using biometrics of people which are unique to them. What happens if the Aadhaar database gets hacked and biometrics of a million people are stolen? Even with the best of security experts designing and securing a system, such an eventuality is eminently possible.

The recourses I can think of in case of such an eventuality would be either for Aadhaar to shut down - the million-odd people whose biometrics are stolen can't be given new fingerprints and irises (a recent news report indicates that fingerprints can be surgically replaced in China for a mere Rs15,000) - or for Aadhaar then to use some other forms of biometrics, say DNA for instance. The overall Aadhaar budget would then increase further.

The above fact is considered a major weakness of using biometrics as an ID, in that unlike a password, biometrics is not replaceable.

Secondly, Aadhaar claims to solve the problem of leakage of government aid that is meant to go to the poor. Aadhaar claims to do so by plugging what it says is the problem of fake identities. To be precise, Aadhaar has now revised its stand and said that it will only deal with the issue of identity proof and the problem of fixing issues with government aid have to be dealt by other agencies.

Nevertheless, Aadhaar has used the above issue - that of its application as solving the problem of leakage of government aid - to justify the whole project.

However, Aadhaar hasn't justified the fact that the problem of leakage of government aid is due to fake identities by giving any numbers or data. In fact, discussions with people who claim to know how PDS works say that the grains are siphoned not at the last mile, that is fair-price shops, but from the warehouses themselves, and this is done with connivance from the highest authorities and politicians.

Fake zombie identities are used as an accounting fraud to siphon off grains. According to these people, it is not that the major leakage takes place because multiple end-customers go with fake IDs and buy more grain. I haven't found any precise data or study on what are the various causes of leakages, how specifically siphoning  of PDS grains takes places, what are the percentages of each way of leakage and how each one can be tackled. If indeed there are no precise numbers, then it is outrageous on the government's part to spend huge amounts of money without such a study and on a solution that may not even tackle the problem to a substantial extent. In fact, if there is no grain arriving at the fair-price shop because most of it is siphoned off at the warehouse itself, what use is proving the identity of the end customer, which Aadhaar claims to do?

Further, if the black marketers announce that a huge amount of grain is now rotten, how is Aadhaar going to tackle that? Incorrect weighing of grains, frauds in weights and measures, or allocating lesser grains than the entitled amount to the end customer, are other ways of grain-siphoning that a mere identity check, Aadhaar style, can do nothing about.

What seems to be necessary and more important to plug government aid leakage is strict enforcement of law and coming down with a heavy hand on those who siphon grains, irrespective of their position.

The UPA government unfortunately hasn't shown much political will in tackling corruption and it is wishful thinking on its part that with the help of Aadhaar the problem will magically go away.

In fact, as far as government aid is concerned, what Aadhaar could possibly do is to help in directly transferring money to the account of the aid recipient, provided of course there are no security issues with Aadhaar and the project can really stop the problem of zombie accounts in the UID database, a tall order in my opinion and even if solved, would increase the Aadhaar budget by a large amount. For instance, it is well known that fingerprints and irises can be faked, and one way to fix that problem is to use fingerprint readers that detect live fingerprints, and iris readers that detect live irises. Even some of such machines can be fooled. But the idea of direct transfer of cash to aid recipients has been struck down by the Planning Commission because cash can be misused - people may end up spending on alcohol rather than grains, for instance. Also, how many of our
poor are literate enough to operate bank accounts? Touts will exploit this opportunity of operating a bank account on behalf of the illiterate people and extract their pound of flesh from the hapless souls, thus leading to another avenue for corruption.

The third problem that Aadhaar fails to tackle is that of abuse and privacy violations. This perhaps is the biggest danger of Aadhaar.

There are two ways Aadhaar can be abused. On the one hand, the ration shop owner for instance can deny the rightful grains to the customer saying that his/her biometric authentication failed and thereby open a new avenue of corruption here - the bigger abuse could be by the State itself.

While on the one hand Aadhaar has so many challenges to tackle on issues such as security, de-duplication of biometrics etc. If these problems are solved, which if at all they can only be done at a huge cost; the success of Aadhaar can open all doors to future authoritarian rulers to cause havoc.

It is well known that one can easily fake evidence by placing fingerprints at the scene of a crime for instance, and a government that has the biometrics of all its citizens, has complete power on its citizens, and can play havoc with the citizenry. While this may not happen with the current government, there is no guarantee that a future authoritarian ruler won't abuse the system.

Aadhaar could thus be extremely dangerous to freedom and democracy itself, a reason why similar identity projects have been confined to the dustbin by many other democratic countries.

Thus, Aadhaar seems to be in a no-win situation whichever way one looks at it. However, there are surely some entities which are reaping the benefits of Aadhaar. These are corporates and IT companies, and in times of recession, Aadhaar has been god-sent for them. No wonder, all
corporates and even a lot of the media are going ga-ga over Aadhaar.

Since everyone in the corporate world seems to have fallen so much for technology not just because of one's love for technology but also because of the financial benefits that come from projects worth thousands of crores, I was just wondering what could be the next thing that one could use to reap the next big bonanza. Once it is clear that Aadhaar won't solve the problem of government aid reaching the poor because grains get siphoned off from FCI warehouses themselves (by the way, recent news reports indicate that 1/3rd of grain in FCI warehouses gets spoilt), one could think of attaching an RFID tag with each grain of rice and wheat so that one can track its path from the field where it is produced onwards. It could be the next Rs500,000-crore bonanza for the corporates!

It is another matter that Chhattisgarh has created a revolution in plugging leakages in PDS, and it cost them much less. Their solution: empower the people, colour all the trucks carrying PDS grains in a bright yellow colour, and if any truck empties grains in any place other than fair-price shops, people themselves report it to the authorities, who then take action.

(The author has a B Tech from IIT Bombay, and a PhD from Columbia University, New York. He currently runs a start-up, Teknotrends Software Pvt Ltd that does cutting-edge work in the area of network security).