Z

Topic of the week : 16th to 22nd January 2012

Topic : Indias UID Scheme

FOR a country that fails to meet its most basic challengesfeeding the hungry, piping clean water, fixing roadsit seems incredible that India is rapidly building the worlds biggest, most advanced, biometric database of personal identities. Launched in 2010, under a genial ex-tycoon, Nandan Nilekani, the unique identity (UID) scheme is supposed to roll out trustworthy, unduplicated identity numbers based on biometric and other data. The goal, says Mr Nilekani, is to help India cope with the past decades expansion of welfare provision, the fastest in its history: it is essentially about better public services. A year ago, only a few million had enrolled and barely 1m

Moving well

identity numbers had been issued. Warnings about fragile technology, overwhelmed data-processing centres and surging costs suggested slow progress. Instead this week saw the 110-millionth UID number issued. Enrolments should reach 200m in a couple of weeks. Mr Nilekani says that over 20m people are now being signed up every month. He expects to get to 400m by the years end. That is an astonishing outcome. For a government that has achieved almost nothing since re-election in May 2009, the scheme is emerging as an example of real progress. By 2014, the likely date of the next general election, over half of all Indians could be signed up. If welfare also starts flowing direct into their accounts, the electoral consequences could be profound.

Read further : http://www.economist.com/node/21542814 http://articles.timesofindia.indiatimes.com/2012-01-11/ranchi/30615852_1_biometric-and-demographic-datafingerprint-data-aadhaar

 As it grows, however, the project is drawing fire. Most pressing, the mandate of the UID authority will expire within weeksonce the 200 millionth resident is signed up. Total costs are rising as UID expands: its budget has more than doubled from nearly 32 billion rupees ($614m) for the first five years, to over 88 billion rupees for the next phase. But the governments chief economic adviser, Kaushik Basu, among others, agrees that savings by plugging leakagesthat is, stopping huge theft and waste in welfare and subsidieswill be very big, very beneficial. The real difficulties are political. Most immediate is the home minister, P. Chidambaram, who is blocking the new mandate. He says he worries about national security. He also looks annoyed that a rival biometric scheme to build a National Population Register (for citizens, not just residents) has been cast into the shade. Run by his home ministry, by late last year it had only issued some 8m identity numbers. Last month, for example, parliaments powerful finance standing committee issued a 48-page report attacking UID, calling it hasty, directionless, ill-conceived and saying it must be stopped.

Concerns

The report contains testimony from a range of experts with legitimate objections. Some were procedural, including a demand that UID be based on law passed by parliament, not, as now, on a mere executive order. Other worries, such as cost, should abate as the unique identities are tied to bank accounts of welfare recipients, and so help track the flow of public money. The omens are good. Last week Karnataka state claimed that by paying welfare direct to bank accounts it had cut some 2m ghost labourers from a rural public-works project. activists and development economists, such as Jean Drze and Reetika Khera, worry that the voluntary programme will turn compulsory, that individuals privacy is under attack and that biometric data are not secure. Once recipients have bank accounts, India can follow the likes of Brazil and replace easily stolen benefits in kind, such as rations of cheap food and fuel, with direct cash transfers. Not only do these cut theft, but cash payments also let beneficiaries become mobilefor example so they can leave their state to seek work, while not jeopardising any benefits. However some fear that money is more easily wasted, say on alcohol. Worse, in the most remote places, cash welfare is no use since food and fuel markets do not even exist. Such fears need answering. India will have to pass a law on data protection and privacy. A shift to cash welfare would have to ensure that mothers benefit most, not feckless fathers. And perhaps only as Indians grow more urban, mobile and wellconnected will they see the full advantage of cash over rations. But for all the headaches, applying the UID to an expanding and reforming welfare system opens the way for profound social change. Indians need to get ready.