289 - 743 - What an idea, Sirji! - Financial Express

Sunil Jain
Posted: Tuesday, Sep 14, 2010

: What do programmes like the New Pension Scheme (NPS), the UIDAI, the Right to Education, the Right to Information, and many more, have in common, apart from the fact that all have been launched by the UPA?

Almost all, believe it or not, were originally efforts made by individuals/NGOs which have now got mainstreamed and have the potential, in both good ways and bad, to change our lives in a big way.

The Right to Information Act, it is pretty well-known by now, was borne out of the work of Aruna Roy and her campaign to have various registers/lists made public, muster rolls of workers who were supposed to have got money from various public works programmes, lists of public works sanctioned and the money allocated to them, and so on. The list of the other parents, as it were, is less well-known, and that is what this piece hopes to correct, at least partially. The timing is a bit off since it was actually meant to coincide with the 13th anniversary of the Delhi-based Centre for Civil Society (CCS) last month, but better late than never!

Parth Shah, who set up CCS, began talking of school vouchers several years ago. Why give a subsidy to a school, which is what government-run schools essentially boil down to; why not give it to parents? That way, if parents are dissatisfied with the quality of education, they will move their children to other schools; this will then put pressure on government schools to deliver. Many others were talking the same language, but what CCS did was different—it collected money to fund the education of 400 children for a year and then used volunteers to go across to certain wards in Delhi on cycle rickshaws using loudspeakers to publicise the scheme. For these 400 students, it got over a lakh applications. Poor India wanted to vote with its feet. The Right to Education Act has several shortcomings, the principal one being the insistence that all schools must be recognised by the government, which will drive up their costs and them out of business. But CCS’s school voucher system is inbuilt into the system since 25% of all school seats will have to be reserved for RTE children for whom the government will make payments. Not bad for a 13-year old.

In 2006, Gautam Bhardwaj, along with others like Vijay Mahajan of Basix, Renana Jhabvala of Sewa and UTI’s UK Sinha, set up Invest India Micro Pension Services (IIMPS), an outfit dedicated to work on pension funds among the poor—the company has set up a proprietary IT platform and even owns the brandname ‘micro pension’. By end 2008, it had begun working with the Rajasthan government in a scheme where the government co-contributed a one-time Rs 1,000 and 50,000 persons signed up for it, contributing Rs 100 per month—Andhra Pradesh, Madhya Pradesh, Karnataka and Haryana have now announced similar schemes, and IIMPS has got queries from other Asian countries to run similar schemes for them. Meanwhile, it also signed another 1,50,000 persons for a similar programme, but without co-contributions from the government—the fund, administered by UTI, has earned around 13% per annum in the last few years. To put this in perspective, the government’s New Pension Scheme has just 11,000 members. Since NPS contributors end up giving around 10-11% of their contributions in commissions, the regulator has now announced NPS-light, with IIMPS-type minimum deposits and is also looking at working with groups like Sewa to get more contributors and at lower costs.

Around the same time, ICICI Bank’s Nachiket Mor branched out into financial inclusion and, with Fino, began figuring out how to take banking to the unbanked. Fino tied up with several banks and financial service providers, began giving biometric cards that captured all financial transactions—service outlets had card-readers and acted as banks.

Fino has 18 million customers today. It gives out money on behalf of NREGA, government pensions and even offers cashless hospitalisation in five states under the Rashtriya Swastha Bima Yojana. Unlike traditional MFIs like SKS who just lend money, Fino’s powerful backend allows banks to offer rural India insurance and money market mutual funds. Precursor to the UIDAI?

Yes, but not the only one. Anurag Gupta’s A Little World (ALW) began with smart-card based microfinance and then moved on to cardless mobile phone based banking. It has 3 million customers across 20,000 villages in 18 states. MCHQ, now mChek, the mobile payments solution, was originally developed by ALW. Others like Abhishek Sinha of Eko have improvised on this further and come up with one-time password generators for cash transfers. Rural banking, what RBI is stressing nowadays, couldn’t have come even as far as it has without these gents.

The Jawaharlal Nehru Urban Renewal Mission, similarly, was part of a process of focussing on urban planning and reform headed by individuals such as Ramesh Ramanathan (who is also an independent director of Fino and the technical advisor to JNNURM) and Nandan Nilekani. 

What an idea,  Sirji!

275 - Don't worry about privacy - The Financial Express

Sunil Jain
Posted: Tuesday, Oct 12, 2010 at 2230 hrs IST

Can the UIDAI be used for religious profiling or to collect data about an individual’s spending habits? What about identity theft?

According to UIDAI authorities, the structure of the database is such that you cannot query it; it is like a black box. So, you cannot ask it, for instance, to give you all the names ending with Jain along with their addresses. Nor can you ask it for all the names of individuals residing in an area with a particular pincode. Since all that the database has is a name, sex, age, address, fingerprints, photograph and an iris-scan, there is no question of having information about spending habits. Since the database has been developed to only answer a simple yes/no, the UIDAI authorities claim identity theft is not possible.

Sponsoring a ‘Project Get MyIris’, with a reward of say a million dollars to a person who can hack into the system, to get your biometrics including the iris details, wouldn’t be a bad idea to set everyone’s hearts at ease!

If it can’t be queried, how does it work?

It can be queried to answer yes/no to items within the database. Once you get UIDAI’d, or Aadhar’d to use the project’s brand name, you get a laminated, waterproof, tear proof paper that can last 20 years. (In case you forget your number, or lose the paper, you can, with your fingerprints, get a duplicate ID number.) So, let’s say the income tax authorities start asking for UIDAI numbers while issuing PAN cards, and now want to check if the person with the UIDAI number ABCD1234 is Sunil Jain, it will get a yes/no answer. If you submit the fingerprint of a person and ask if this is Sunil Jain, you will get a yes/no. If you ask for a fingerprint of Sunil Jain, the database is not programmed to give it to you.

Can the programming be changed to allow for this in the future?

Theoretically it can, but UIDAI authorities say the plan is to keep it this way. In addition, there are various other checks to protect the database. But since the database does not keep information on incomes or credit card histories, the incentive to hack into it is low.

Is it possible to get a fake UIDAI number?

You can, but you can never ever get another UIDAI number under another name. So, if an individual X goes and gets a UIDAI number under he name Y, she can never apply for another UIDAI number. Say, she does. The system will automatically reject her saying there is already another person with the same biometrics in the system. That is, the incentive to game the system is zero. In case you wish to have your ID changed, say you no longer think having an Amitabh Bachchan ID is helping, you can get it changed after submitting your biometrics again. But no person can ever have more than one UIDAI number.

How do you get a UIDAI number?

Each state government appoints registrars and they, in turn, could appoint a UTI or a Wipro as an enrolment agency. Go to the enrolment agency and get yourself a number.

Do they ask for any proof of address?

Yes. There are 17 documents that can be used as proof of identity, ranging from a PAN card to photo IDs issued by recognised educational institutions. There are other documents that are to be used as proof of address.

What if you don’t have an address? And will the UIDAI go and check if the person actually lives at the address given?

If you don’t have proof of address, as in you’re a migrant, there is the concept of introducers and they can vouch for you. This could be the Panchayat head, for instance. No check of the address will be done, but this is where your UIDAI number will be sent.

How do you find an introducer if you are a migrant worker?

UIDAI has just tied up with an alliance of 20+ NGOs that work with migrants. So the NGO will find a way to help. In the case of Delhi’s homeless who were given UIDAI numbers, the homeless shelters they lived in were entered as the address. The design execution is kept flexible.

Can I be the introducer for my maid servant?

Not right now! Since there is no penalty for introducing the wrong person, the idea is to limit the introducers to certain types of officials the government trusts. In Andhra Pradesh, the government has appointed the NREGA department as the introducer. As a last resort, the UIDAI can also appoint introducers and get them registered with it. So, DLF can be registered as an introducer given the number of migrant labourers it works with, or even TeamLease given its status as the largest temping agency in the country. But that’s in the future.

work with ration cards and how will it certify the income of the person getting the card?

UIDAI cannot certify the income of a household. So, in case of Delhi, the government will get a survey done to identify the poor and to give them ration cards. If they have UIDAI numbers, these will be fed on to the card. If this will be a smart card, with my biometrics (collected by the Delhi government) or with my UIDAI number, each time I buy rations, my card will reflect this. Now let’s say that one person tries to get three ration cards, as a brother in one, a father in another and a son in the third, the Delhi government’s computer will be able to spot that one UIDAI number figures three times. But if there’s a rich person who has a BPL card, the UIDAI can do nothing to detect this.

So how can that be done?

If the Delhi government wants, it can run its UIDAI numbers against those with the Income Tax Department or those with various property registries or some other database. If the numbers are common, the ration card can be rejected.

Does the UIDAI pay money to people who get numbers?

The 13th Finance Commission has allocated Rs 100 for each person in case a state has 100% coverage of BPL households. So if the state government wishes, it can make a payment.

Is UIDAI a substitute for KYC?

Not yet, but RBI is considering this. Last fortnight, RBI called a meeting with all banks where UIDAI authorities demonstrated how the UIDAI number could be used to make financial transactions in faraway villages. The UIDAI is discussing the possibility of using UIDAI for telcos as a substitute for the KYC required as per the rules.

Why should a poor person get a UIDAI number?

Today, any person getting government money, through NREGA or various health and other schemes, has to go to a designated office to check on whether the money has arrived. This could end up wasting precious days of working time and involve significant transport costs. If a person has a UIDAI number and uses this to open a Post Office account, the money can be electronically wired by the government. While sitting in the village, using the Banking Correspondent in her village, she can get to know if the money has arrived and then withdraw it. Zero transaction costs.
you let the poor know of these benefits?

UIDAI itself has a Rs 50 crore budget for advertising this year. There is no limit to the budgets the states have....