Posts Tagged ‘SCF’

Nine reasons why we should support Aadhaar

26 December 2011

BHAMY V. SHENOY writes from Houston, Texas: Hundreds of crores of rupees have been spent on it. Millions of Indians have stood in queues and registered themselves for it. One of India’s biggest corporate heads has staked his all for it. Now, the parliamentary standing committee on finance (SCF) has found problems, big problems, with Nandan Nilekani‘s unique identity project, Aadhaar.

To be sure, even before the publication of the parliamentary panel’s report, there was plenty of opposition to Aadhaar. Civil liberites activists asked searching questions on its constitutional status, its core objectives, its intrusion of privacy, and its benefits. Sections of the media were not far behind. Now that trickle of criticism has become a torrent.

It is understandable why the political class would oppose Aadhaar; they stand to lose the most. But one expected the NGO movement, especially the consumer protection and rural/slum development oriented NGOs, to show more support to Aadhaar.  These NGOs are familiar with the rampant corruption in the implementation of various government welfare measures and Aadhaar was conceived to help solve the problem.

The parliamentary standing committee report on finance has not advanced any new arguments or rationale to support the opponents of Aadhaar in opposing the conceptualisation and execution of the project. However critics have used the opportunity to put some old poison into a new bottle to kill Aadhaar by selectively quoting from the SCF report.

Not much has been discussed about the fact that there were three MPs who dissented with the majority opinion. While it is good news that there was no political infighting in drawing up the SCF report, the bad news is that the very political class that is showing extraordinary interest in fighting corruption has thrown away a foolproof weapon provided by Aadhaar to reduce graft.

Only the self-interest of politicians can be driving force behind such rare political unanimity! But Aadhar needs to be supported.

Here are my nine reasons for supporting Aadhaar.

1. Aadhar can plug massive misuse of subsidy: There is not one kind or encouraging word mentioned in the SCF report on how Indian society can use Aadhaar to deliver several welfare measures approved by the parliament to the poor of India.

This is because it is the political class which is the biggest beneficiary of black money generated by diverting PDS kerosene and residential LPG as well as from the misuse of several welfare measures like the national rural employment guarantee scheme (NREGA), etc.

I had predicted that politicians would try to kill Aadhaar  in a research report, Lessons learned from Attempts to Reform India’s PDS Kerosene Subsidy which I had for Global Subsidy Initiative.

It is a well known fact that there is a large amount of diversion of PDS kerosene to the black market and also to blend with petrol and diesel. The same is true in the case of highly subsidized residential LPG (which is a welfare measure of sorts for the rich and the middle class).

What is not often discussed or highlighted is the amount of black money generated by these illegal activities. Actually this is the mother of all corruption, generating more than Rs 45,000 crore per year. This scam is  shockingly far larger than 2-G scam.

Since the amount is shared from top to bottom, the wily political class is not interested in supporting a project which will result in killing the golden goose. Only recently the research on the misuse of subsidy is bringing such facts to public attention.

2. Aadhaar does not need Parliament’s approval: Aadhaar is a tool to deliver welfare measures: Therefore it does not require approval from the parliament.

Once a welfare programme like PDS kerosene, subsidized food, NREGA, access to high-tech facilities are approved by the government, is there a need for the executive branch to get approval as to how best to deliver such programs with minimum leakage?

Let me give an example of how the political class killed an efficient system of delivering PDS kerosene in Karnataka. In the mid 1990s, at the suggestion of Mysore Grahakara Parishat (MGP), the Karnataka government had implemented a “coupon” system to ensure minimum diversion of PDS kerosene in Mysore.

It was so successful (dealers used to wait for consumers to come and buy their quota which was unheard of), that the government wanted to expand it to the whole state. However the dealers and all the political parties managed to kill the project, not just in the State but outside too.

At the suggestion of the Planning Commission, a few states introduced a smart card system to streamline PDS kerosene. Did any one raise an objection claiming it is unethical for the government to adapt it without getting the approval of the legislature?

Looks like history seems to be repeating itself the case of Aadhaar at the national level.

3. Aadhaar does not compromise privacy: Critics of Aadhar have raised the bogey of privacy. This is totally irrelevant as an issue.

An application for a driver’s license demands a lot more information than Aadhaar. Voters’ lists, provided to any one who asks for it, also have a lot more information on citizens than Aadhar. Private agencies which help Indian embassies to process passports handle a lot more information.

Has any one raised privacy questions? So why the hue and cry over Aadhar?

Many US Supreme Court findings (eg Schmerber v CA,384 US 757, 1966; US v Dionisio, 410 US 1, 1973) imply that the use of biometrics does not invade an individual’s civil liberties or privacy.

The Supreme Court of India has instituted a committee under the chairmanship of a former judge  to look at PDS. The Justice Wadhwa report has suggested a computer-based information system as well as the use of biometric smart cards to reduce leakages. The committee was, in fact, recommending an Aadhaar type programme even before Nilekani was entrusted with that task.

Why did the SCF fail to take into consideration the critical recommendations of a Supreme Court instituted committee which is also as mindful of privacy as any expert or activist?

4.Biometric technology is OK: Many including the SCF have pointed out the inherent problems of the biometric technology in accurately identifying individuals. But the truth is that the young technology, provides adequate accuracy and is in fact advancing rapidly.

While the government has admitted that accuracy may be no more than 1%, it has also suggested that there are in-built safety mechanisms not to deny any legitimate person the assistance approved by the government.

According to UK’s National Physical Laboratory, the probability of a false negative ( person not being recognized) using biometric is 1 out of 10,000. The probability of false positive is even order of magnitude less (1 out of 1,000,000).  As far back as 2003, NPL had accepted the feasibility of using biometrics (finger prints or iris) for identification of all UK individuals.

A report published by International Telecommunication Union in 2009should remove any doubt people may have about the use of biometric tool for individual identification.

That report has the following conclusions:

“Within a fairly short period of time, biometric recognition technology has found its way into many areas of everyday life. Citizens of more than 50 countries hold machine-readable passports that store biometric data–a facial image and in most cases a digital representation of fingerprints–on a tiny RFID chip, to verify identity at the border. Law enforcement agencies have assembled biometric databases with fingerprints, voice and DNA samples, which make their work more efficient and manageable. Commercial applications use biometrics in local access control scenarios, but also increasingly in remote telebiometric deployments, such as e-commerce and online banking, and complement or replace traditional authentication schemes like PIN and passwords.”

5. Aadhaar is ahead of its time: SCF has cherrypicked the UK example to argue that Aadhaar may not work because the UK decided to drop their national ID card. Why didn’t SCF discuss examples of several countries like Brazil, Australia, US and others  where biometric based cards/documents are in use?

There are many similarities between the social security number system in the United States and Aadhaar in India. A country like the US where privacy issues, human rights, etc are high on the agendas has not found any problem. Aadhaar is really a more sophisticated concept of SSN of the US.

If the US were to implement SSN now, more than likely they would have also developed a scheme like India’s Aadhaar. SSN is given to any legal resident of the US and so also Aadhaar. SSN has not created any security issue. The same will be the case with Aadhaar. It can be argued that India has leapfrogged the USA by implementing Aadhaar.

6. Aadhaar has no security issues: Some critics have tried to create a scare by suggesting that Aadhaar should be treated as a national security issue though the parliamentary standing committee did not discuss Aadhaar directly from that point of view.

In today’s networked society, there are so many data bases which should be of much higher priority in terms of national security than a data base containing biometric information on residents of India. On the other hand it can be argued that Aadhaar data base may serve the purpose in getting information on terrorists.

In some countries there are proposals to use biometric data bases to monitor the movement of terrorists. By being creative and through building enough safety features Aadhaar could make it very difficult for anyone to access Aadhaar data while it can serve the national security purpose by identifying terrorists.

7. Aadhar’s benefits outweigh its costs: It was shocking to find SCF referring to some newspaper article quoting a high cost figure of Rs. 1,50,000 crore while the total budget request of UIDAI is for about Rs. 12,000 crores for three phases.

The savings generated by using Aadhaar to better distribute welfare measures can more than compensate its cost. Even assuming that the actual cost may be more than what is budgeted, the avoidance of black money generation from the diversion of PDS kerosene and residential LPG alone of Rs 45,000 crore per year can easily pay for Aadhaar project.

In addition there is the additional money savings from improved welfare delivery systems like food, fertilizer, MNREGA etc for which Aadhaar can be used.

When SCF took the opportunity to scare the readers by quoting an unsubstantiated cost figure of 1,50,000 crores, it did not take any effort to find out the potential savings from the use of Aadhaar.  A recent Karnataka’s Lokayukta report estimated that the misuse of food subsidy alone costs more than Rs 1,740 crore per year for Karnataka.

8. Failure of bureaucracy cannot be held against Aadhaar: It is true that coordination between different departments of the government who are the stakeholders (Planning Commission, Registrar General Of India, Election Commission, Ministry of Rural Development, Ministry of Urban Development, State Governments) has not been satisfactory.

It is also true that there has not been proper planning or coordination between different users of Aadhaar or agreement on using it for deriving maximum benefits out of it (NPR, MGNREGS, BPL,census, UIDAI, RSBY, and bank smart card).

The fact that the bureaucracy has failed or the government machinery has not done its job in coming with an efficient ways of making use of a new technology like Aadhaar should not reduce its usefulness. It is also true that prior to taking up a major project like Aadhaar, UIDAI should have conducted a cost benefit analysis and looked at all different alternatives. Unfortunately it failed.

Instead of taking a positive view of the study done by Ernst & Young, SCF was critical of it to send back the bill. The study did show that among all different alternatives Aadhaar is the best. Instead of making positive recommendations to improve the inner workings of the government department in exploiting a tool like Aadhaar , to throw doubts on the efficacy of Aadhaar is doing a disservice to the country.

A high level committee consisting of elected representatives can be expected to take an unbiased view of a new initiative like Aadhaar. SCF report unfortunately is biased. The committee report quotes opinions of only the experts who are critical of the project. Did they try to find at least one expert who is in favour of the project?

9. Parliamentary committee raises irrelevant or inconsequential issues: There are several nit picking issues raised against Aadhaar in SCF to question its usefulness. For example is Aadhaar mandatory or not? For those who do not want to avail themselves of welfare assistance it is not mandatory. Human rights  and privacy activists should appreciate such a position.

Is ration card mandatory today? It is not. However for those who want subsidized food items or PDS kerosene it is mandatory. Is there any thing wrong in imposing Aadhaar on the beneficiaries to ensure there is no leakage? Aadhaar can definitely serve to identify but not as a proof of address. Is there any thing wrong with that.

Can driver’s license issued many years back or old water/telephone/electricity bills serve as address proof? The same is true with Aadhaar. Aadhaar is only to serve as identify from the beginning and not serve any other purpose. Only with the purpose of throwing aspersions of Aadhaar these nit picking issues are raised.

It is very unfortunate that the staff of SCF has not done a creditable job in advising its members of the real issues. There is nothing wrong in sending back the bill if only they had done an unbiased review and ended with some specific recommendations to make better use of Aadhaar.

Let us not throw baby with the bath water.

The parliamentary committee argued convincingly that UIDAI has failed to do a better job of coordinating with different departments, failed to carry out proper cost benefit analysis prior to starting of the project and failed to have a well laid out plan to exploit the application of Aadhaar for different uses.

But none of this can lead to dropping or even worse killing Aadhaar as many have assumed. If the committee had taken an unbiased view its conclusion would have been far more positive putting India on a different trajectory to fight corruption in a big way.

Just like the Lokpal can help reduce corruption, proper and well planned use of Aadhaar can reduce corruption and have transformational impact. Arvind Kejriwal who has fought against corruption in PDS should convince Anna Hazare to support the government in moving ahead with Aadhaar.

Just like Lokpal, Aadhaar has all the potential to be a game changer.

Also read: Nandan Nilekani: 6 things that changed India

CHURUMURI POLL: Has Nandan trounced NRN?

Dear Nandan Nilekani: Quit Infosys, start a party

Nandan Nilekani: The five steps for success


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