Wednesday, March 2, 2011

22 - Unique ID for Indians - Boon or Bane ?

Sunday, May 23, 2010
38 - Unique ID for Indians - Boon or Bane ?

Unique ID for Indians - Boon or Bane?
Source: The Wall Street Journal India,
Source Date: Monday, October 05, 2009
Focus: Citizen Engagement
Country: India
Created: Oct 05, 2009

INTRODUCTION: Nandan Nilekani was recently handpicked by Prime Minister Manmohan Singh to head the newly created Unique Identification Authority of India. No one doubts the immense potential of the project nor does one doubt the impeccable credentials of the man chosen to lead it. But given the powerful nexus of entrenched politicians and bureaucrats who stand to lose their power and influence, will this project really see the light of the day? Mr. Nilekani's bold endeavor may mark the beginning of a new era where distinguished private citizens take on challenges of national importance or he may end up becoming a disillusioned man in the same way as Sam Pitroda when the latter tried to usher in the telecom revolution to the country. We look at the underlying dynamics that may make or mar this project. Is this the right project at the right time in the history of our nation or should we scale back our ambitions to focus more on what is achievable rather than merely aspirational?

Krishna Chilukuri: UIAI and India's first Steps Towards e-Governance

India has finally taken on a bold challenge to create a unique identification for all Indians and appointed IT business leader and visionary, Nandan Nilekani to head the task. This is a big vision project through which government services can be provided, tracked and accounted for along with enabling a multitude of private sector products and services that rely on accurate and positive identification of consumers.

Krishna Chilukuri

In order to enable the next phase of growth, India has to tackle domestic issues of corruption, inefficiencies, lack of strong enforcement of the rule of law and internal security. There is a strong correlation between countries that are on the top of the United Nations e-Government Readiness Index with their success in lowering corruption and having a high quality of life as measured by the Human Development Index. Most e-Government implementations rely on positive and accurate identification of their citizens and the interconnection of databases and information across government bodies and services. The unique identification program is the first step towards creating the infrastructure for e-Government services in India. The goal should be no less than aiming to be in the top 10 countries on the UN e-Government readiness index which will have a positive effect on not only the economy but also on human development in India.

The core task for the Unique Identification Authority of India is to assign a unique identification number to each resident in the country and to eliminate the need for multiple identification mechanisms. This unique number will be the basis for a positive and accurate identification of citizens on which e-Governance platforms and services can be built around. One such project is the Citizens Smart Card Project, which will enable citizens to avail subsidies on food, energy, education, etc. depending on their entitlements, according to the 11th report of the Second Administrative Reforms Commission.

e-Governance also has the potential to tackle corruption which is at the root of the problems that currently are a drag on our economic growth. Our government departments work in isolation, each having its own database with no linkage to other government databases. These databases are usually not in good shape with problems of data entry, duplicate entries, dead entries, and more which make data reconciliation difficult. Most recently India was ranked 74th in the International Corruption Index and international companies often cite corruption and government inefficiency as reasons for not investing in India. It is imperative for India to tackle this issue and e-Governance built on unique identification is the right strategy for India.

A project of such magnitude is inherently challenging and difficult to implement. It will require tremendous resources and effort and success is not always guaranteed. There are many challenges to overcome in its implementation, specifically issues related to privacy, misuse of data, excessive government oversight and possibility for discrimination and bias. The sensitive nature of some of these challenges call for impartial leaders and managers who are not politically motivated or biased and who have high integrity and public trust. The current government of India could not have chosen a more appropriate leader than Nandan Nilekani to lead this project.

Nandan Nilekani has proven himself in the corporate sector, building one of the most admired companies in India and earned public appreciation with his book "Imagining India – Ideas for the new century." He is a Padma Bhushan award winner and was named among the 'World's most respected business leaders' in 2002 and 2003, according to a global survey by Financial Times and PricewaterhouseCoopers. Nandan Nilekani has both the passion and dedication for India's future as well as the technical expertise and managerial skills to tackle a problem of such magnitude and is the right person to lead this effort.

As Mr. Nilekani has said in an interview with Knowledge@Whatron, "The other important thing, I felt, was that India had a very small window of opportunity. It has this huge demographic dividend and this young population, but that demographic dividend could well become a demographic disaster if we did not make the right investments in our human capital."

The time has never been more critical for India to break out of its shackles and strive towards a better future for all its citizens. The unique identification project is only the first step in the right direction – we need many more.

Vignesh Nandakumar: Unique ID Scheme – More Politics Than IT

One of the UPA government's biggest announcements after a landmark electoral victory was that of appointing Nandan Nilekani as the head of the Unique Identification Authority of India. The Unique ID opens up enormous possibilities for India at this stage of its growth. However, the real challenges of implementing such a project in India need to be addressed credibly so that this project fulfills its objectives.

Vignesh Nandakumar

The project plans to use state-of-the-art biometric and Information Technology on a phenomenal scale, and will have its share of technological challenges. However, the project itself is less about technology, and more about the politics and processes of providing every Indian with a Unique ID.

The biggest stumbling block to national IDs in many advanced countries has been the violation of privacy rights guaranteed under their respective constitutions. Two of the largest populated countries in the EU, Germany and Hungary, have not implemented one for these reasons. The USA Patriot Act, enacted by the U.S. Congress, to vastly increase powers of surveillance and implement a biometric identification system, faced enormous opposition and has since been scaled back. Biometric identification systems have been rejected in advanced countries due to concerns over efficacy in enhancing security and high implementation costs. The Unique ID scheme could potentially lead to large scale abuse in a country like India in the absence of effective legislation providing adequate safeguards to prevent misuse.

Though originally mooted to address our security needs, the scope of the ID has been expanded to aid delivery of social sector schemes to deserving citizens. This complicates the implementation because it combines both authentication and identification with the same ID.

There are systemic challenges germane to India. The legislative and delivery control over social sectors is divided between the states and the center, making the ID effective only through agreement from all the state governments. The citizen service centers at the district level have to be equipped with technical and manpower capability to use the ID while administering services such as birth and death registrations, land records and employment insurance. This is a Herculean task considering the level of granularity that needs to be achieved. The lack of stable 24 hour power supply across the country will hinder access to the central databases for authentication. It is unclear if these systemic issues have been addressed, failing which the ID scheme will be ineffective.

Aligned to the issue of privacy is the issue of saliency that arises when certain aspects of a person's identity are publicly highlighted. Identifiers such as caste, religion and place of birth will be required for social sector schemes. Numerous social studies show that knowledge of these identifiers adversely impacts delivery of services such as education and health care to disadvantaged citizens, defeating the very purpose of the ID. These contradictions, which is unique to India, have to be reconciled to prevent selection bias.

However, these challenges do not take away the high impact of this idea, if well executed. With a person of Mr. Nilekani's capability and stature heading this project, one expects some of these issues to be already tabled for action. While his appointment is a welcome step, the current organizational structure of the UIDAI, headed by Cabinet Minister rank Chairman, reporting to the Vice-Chairman of the Planning Commission, also of Cabinet rank is politically unsustainable. The country also lacks a legal framework permitting the involvement of a person from neither the political spectrum nor the administrative services in what is essentially a political scheme. Continuity of this structure beyond Mr. Nilekani's involvement could be a problem. The government of India should enact clear processes for capable private citizens to hold office, perhaps through the amendment of the IAS system, so that the government and the country can benefit from these talented leaders.

The Unique ID is a critical piece of information infrastructure that India needs to boost its growth. However, the above issues need to be addressed satisfactorily to ensure it doesn't create more problems than it solves. The central and state governments must enact legislation for adequate safeguards and operating processes for sharing of the databases amongst states, before the Unique IDs are issued. Failing this, there will be few users and takers for the scheme.


Krishna K Chilukuri is currently pursuing the post graduate program in management at ISB. He has over 15 years of work experience in the corporate world encompassing stints around the world and in many different roles. Mr. Krishna's interests include Strategic thinking, marketing 2.0 as well as game theory and its practical applications in decision making.

Vignesh Nandakumar is currently pursuing the post graduate program in management at ISB. He has over eight years of experience in the high-tech industry in various parts of the world. He is passionate about the prospects universal education and renewable energy offer for empowering growth in India. He holds a keen interest in the role of technology in public policy and governance.

The opinions expressed in this article are entirely the personal opinions of the students which were formed on the basis of an interpretation of facts and data available in the public domain. The ISB, as an institution, does not subscribe to these views in whole or in part.