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LATEST NEWS UPDATES | Study Shows Unique ID’s Reach to India’s Poor-Amol Sharma

Study Shows Unique ID’s Reach to India’s Poor-Amol Sharma

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published Published on May 1, 2012   modified Modified on May 1, 2012

When India embarked on its “unique ID” project in the fall of 2010, pledging to distribute unique 12-digit numbers to 1.2 billion people, the hope was that hundreds of millions of Indians who don’t have a passport, driver’s license or other credible identity document would get one – and with it, a ticket to essential government and private sector services.

A new survey led by Arun Sundararajan, a professor at New York University’s Stern School of Business and Ravi Bapna, a professor at the University of Minnesota’s Carlson School of Management, for the first time answers whether the program is targeting the demographic it intended to, and highlights which states are signing up people at the fastest pace.

The data, released exclusively to India Real Time, shows that more than 56% of the enrollees in the program so far did not previously have a “portable ID” such as a passport, driver’s license or PAN (Permanent Account Number) card. And 87% of those households have annual income below $2,000 per year, confirming what many social scientists and journalists have long assumed – that the people without good identity documents tend to be lower-income earners.

Mr. Sundararajan said the results point to “excellent” targeting by the UID program so far. “It’s validation of the fact that this is not a digital infrastructure for the privileged. It’s for the people who aren’t included,” Mr. Sundararajan said.

According to the survey, more than 70% of all households (not just UID enrollees) have no member with a portable ID. Those households have to rely on ID cards that are more subject to fraud and don’t guarantee benefits if a family moves to another town or district, such as ration cards for the food subsidy system and IDs for the rural job program known as the National Rural Employment Guarantee Act. The illiteracy rate among those without portable ID is four-times higher than the rest of the population.

The government was hoping to have signed up 200 million people for unique IDs by March 2012, but things are a bit behind schedule. As of mid-April, some 170 million people had been issued UIDs after going through a sign-up process that includes iris and fingerprint scans. When it signs up everyone, India will have created a biometric database many times larger than anything else in the world, as The Wall Street Journal explored in depth when it launched.

The program, dubbed “Aadhar,” or “foundation” in Hindi, has had its share of bumps. There were fears of overlap with the National Population Register, a Home Ministry-directed program that will create its own database of all Indians using biometrics – largely for security purposes. The two agencies early this year decided to divide data collection responsibilities, though they acknowledged some potential duplication of efforts.

Meanwhile, the legislation that would give the unique ID program a statutory mandate ran into a roadblock last year when a Parliamentary standing committee rejected it, citing concerns about security of data, issuance of numbers to non-citizens, and identity theft, among other issues.

In the meantime, the Unique Identification Authority of India is running under executive branch authority. Officials at the agency, including Chairman Nandan Nilekani, a former technology industry titan who has Cabinet rank, were unavailable for comment.

The survey of 514,000 households in 2011, conducted by India’s National Council for Applied Economic Research, is part of a broader, multi-year study of UID’s socio-economic impact by Messrs. Sundararajan and Bapna that is also getting support from the Indian School of Business.

The southern state of Andhra Pradesh has issued nearly 43 million UIDs, the most of any state, followed by Maharashtra with 33.8 million. Karnataka is No. 3 with 13.4 million, but leads the pack in reaching the most underprivileged households. The median annual income of a UID enrollee in Karnataka is $1,000, according to the survey.

“These are states that are generally on the leading edge of technology and have a history of investments in digital infrastructure, so it’s not surprising they would be ahead of the rest of the country,” Mr. Sundararajan said. Andhra Pradesh has issued biometric ration cards since 2005, for example, while Karnataka was a leader in digitizing land records.

Mr. Sundararajan expects that if enrollments continue according to current projections, around 300 million Indians who previously didn’t have a portable ID will have a unique ID by the end of 2012.

Making use of the UID number effectively and integrating it into existing ID cards is a separate challenge for the government. Plans are underway to incorporate UID into welfare programs like food distribution and healthcare delivery, and there’s talk of creating low-frills bank accounts for the poor, where cash benefits could be directly transferred.

Indian Finance Minister Pranab Mukherjee said in his March budget speech that the Aadhar system is ready to support direct cash payments into the accounts of people in the rural job program as well as pension payments for the elderly, disabled people and widows. India spends tens of billions of dollars on major welfare programs and subsidies for the poor, but critics say a huge chunk of the money never makes it to the intended recipients because of corruption and inefficiencies.

Cost-effective technology will need to be developed and rolled out around the country so government departments, banks, mobile phone companies and other institutions can capture fingerprints or otherwise validate that a beneficiary or customer is who they say they are, and didn’t just rip off someone else’s UID number. That’s no easy task.

The professors’ ongoing survey isn’t asking users about their privacy views. Some public interest groups have raised concerns that there aren’t sufficient protections to ensure the organizations enrolling people on behalf of the government don’t gather unnecessary amounts of personal information and to protect data that’s collected from being misused.

Mr. Sundararajan said that is outside the scope of his survey and said it’s inevitable that as a country like India builds digital infrastructure, there will be databases storing information about citizens. “If you compare the U.S. to India – there is far more known about citizens in the U.S. electronically,” he said. “Creating electronic databases is a byproduct of modernization.”

The Wall Street Journal, 24 April, 2012, http://blogs.wsj.com/indiarealtime/2012/04/24/study-shows-unique-ids-reach-to-indias-poor/


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