A new Internet is being built: it has 1.1 billion users, one-third of the World Wide Web. Indian banks are running transactions on it and Microsoft has embedded it into Skype.
The biometric identifier program Aadhaar — or “foundation” in Hindi — has taken on a life of its own, authenticating loans and job seekers, pensions and money transfers across India. Last week’s landslide state election win could embolden Indian Prime Minister Narendra Modi to push Aadhaar beyond its early cost-saving goal, even as questions are raised about the security of its data and the proliferation of private companies seeking to profit from the information it stores.
Other countries are also looking at similar programs, but research shows it is best to develop one standardized system so people can carry their identification wherever they go in the world, World Bank chief economist Paul Romer said.
“The system in India is the most sophisticated that I’ve seen,” Romer said. “It’s the basis for all kinds of connections that involve things like financial transactions. It could be good for the world if this became widely adopted.”
Identification is the first step to accessing services such as healthcare and education in a world where 1.5 billion people cannot prove who they are.
The UN’s Sustainable Development Goals aim to provide legal identification to all by 2030, triggering the creation of a range of platforms that offer basic rights to citizens of poorer countries while allowing those in the advanced world granular control over their digital data, such as school or medical records, and streamlining immigration.
An ambitious government-run project — just like the Internet at the time of its creation decades ago — Aadhaar began in 2009 to target payments to the poor across India’s vast hinterland.
Other governments are already interested in its potential. Countries such as Tanzania, Afghanistan and Bangladesh have visited India to talk about the system, said Nandan Nilekani, the billionaire cofounder of technology company Infosys Ltd and former chairman of the Unique Identification Authority of India, which created Aadhaar.
Russia, Morocco, Algeria and Tunisia have also indicated their interest in Aadhaar, Indian Telecom Regulatory Authority chairman R.S. Sharma told newspaper Mint in July last year.
“They’re all keen to see how they can replicate this in their countries,” Nilekani said by telephone. “This is a great example of how governments can build the most modern digital public infrastructure, and make it available as a public good to everybody.”
In its World Development Report 2016, the World Bank said “a digital identification system such as India’s Aadhaar, by overcoming complex information problems, helps willing governments to promote the inclusion of disadvantaged groups.”
AADHAAR ADVANTAGES
Here is how it works: A unique 12-digit number is assigned to Indian residents, backed by biometrics including fingerprint and iris scans stored in a central database. If an individual wants to open a bank account or buy a mobile SIM card, they need to provide their Aadhaar number and place their finger on a scanner. This action permits the bank or utility to ask the Aadhaar database to verify their credentials.
Earlier, a sheaf of documents were needed as proof of identification, a tough task in a country of 1.3 billion where 40 percent are not registered at birth and 30 percent cannot even read or write their own name.
About 99 percent of adult Indians hold an Aadhaar identification number that links to about 84 government services, which will soon include the whole of India’s food distribution system, the world’s biggest welfare program.
Aadhaar is saving Modi’s administration about US$2 billion per year, which could rise to US$7 billion by March next year, or 0.35 percent of GDP, research firm CLSA said.
The private sector is also benefiting from Aadhaar. Reliance Jio Infocomm — controlled by India’s richest man, Mukesh Ambani — sold 100 million SIM cards in six months — or about seven each second — by using the system to verify customers’ identification, while Google is in talks with the government to use Aadhaar.
Smaller companies are creating blood donation registries based on it, and people can withdraw money or make cashless transactions using Aadhaar without needing a secret code or even a card.
Microsoft last month created a lightweight version of Skype for Indians, who can use Aadhaar to identify themselves.
“What’s happening is Aadhaar servers are saying ‘yes, this person is who they are saying they are,’” said Eve Maler, vice president of innovation and emerging technology at ForgeRock, which has worked with governments including New Zealand on data protection.
The question is, she said: “How much information comes along with that authentication event?”
SURVEILLANCE STATE
For all its potential, Aadhaar has also been criticized as enabling the creation of a “Big Brother” surveillance state.
Indeed, Modi opposed Aadhaar before coming to power, saying it violated national security and the privacy of citizens. Now he counts it as a key part of his push to move India toward cashless transactions and save money on the payment of social security benefits.
“Centralized databases, even if the information contained therein on any one individual is kept to a minimum, pose a risk,” said Dakota Gruener, executive director of ID2020, a public-private partnership that aims to create digital identification for refugees.
The individual’s “root identity” should be treated as a fundamental right and anyone wishing to do ill — even a government — should not be allowed to alter or delete it, she said.
There has been no incident of misuse of Aadhaar biometrics leading to identity theft and financial loss over the past five years, the issuing authority said in a statement on March 5, in response to a spate of news reports about breaches.
However, in a briefing it said it had shut 12 private Web sites and 12 mobile applications and was on the verge of closing 26 more for illegally obtaining Aadhaar numbers or enrollment details.
The debates surrounding Aadhaar — identity proofing and privacy — are similar to those playing out in the wrangling over the revision of standards governing the Internet, as government and business struggle to find the perfect tool to authenticate people’s identity and safeguard their data.
The UK in 2010 announced it was scrapping a plan for a national identity register after objections that it infringed on civil liberties, but it has continued to issue biometric residence permits for foreigners.
France is debating a mega database for biometric details of citizens.
The US Federal Trade Commission said identity theft complaints were the second-most reported in 2015, even as calls intensify to create a biometric identification for all legal US workers.
Aadhaar is designed on the principle of “optimal ignorance,” Nilekani said.
For example, while Aadhaar knows you are using the system to identify yourself on Skype, it is never privy to the details of the call.
Microsoft has said it deletes all Aadhaar data once the call has been disconnected.
The problem is not so much with Aadhaar, said Romer, who founded a technology company in 2000, but with the many private firms collecting large amounts of data about people.
“It should be part of the policy of the government to give individuals some control over the data that the private firms collect and some control over how that data is used,” he said.
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