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A quiet revolution for a billion people

Quiet revolution for a billion people

Aadhaar is a Hindi word that means foundation or base. It seems fitting that Aadhaar is also the name of a biometric ID scheme that forms the basis of a quiet revolution in India.

India is employing the latest technology to overcome decades of under-investment, which has led to incomplete official records, widespread illiteracy and millions of people who live their lives outside the official economy.

The inability to verify someone’s identity impedes the most basic tasks – opening a bank account, filing a tax return, claiming government assistance – that people in wealthier countries take for granted. Poor record-keeping paves the way for abuses such as identity theft and fraud.

Over the past eight years, the country has been building a national database that assigns a unique 12-digit identification number to each person, linked to biometric data such as fingerprints and iris scans. More than 1.1 billion people, out of a population of around 1.3 billion, have been signed up.

While initially voluntary, Aadhaar verification is routinely required to sign a mobile phone contract, buy a train ticket and even claim a free school lunch.

One commentator has lauded the scheme as the world’s first national digital infrastructure, an achievement on a par with the construction of Britain’s railways during its Industrial Revolution, or the interstate highways that contributed to America’s love affair with the car.

The hope is that it will eventually form the basis of the next generation of digital financial services – enabling digital payments across different platforms, opening a bank account with a selfie, and other things that haven’t even been dreamt up yet.

Technology start-ups, international banks and venture capital firms are said to be promoting research into new services that can piggyback off the database. If successful, India would become an unlikely champion of the new global digital economy.

It’s way too early to say whether the scheme will live up to the hype, but this is a good example of how a resource-constrained country can use a new and affordable technology – Aadhaar has cost around $1 billion, an amount that would run Britain’s National Health Service for less than three days – to solve what seemed to be an insurmountable problem.

The authorities say they are already seeing the benefits. For example, there are reports of school enrollment numbers slashed as phantom students dreamt up to claim extra government subsidies disappear under renewed scrutiny.

However, its critics have denounced the database as a gross invasion of privacy, amid related concerns that personal data may have been mishandled and inadequate safeguards may have allowed some people to register under false names. Some scanners haven’t been able to read the fingerprints of manual laborers, their prints being too worn out.

No system is perfect, especially one created on such a scale. In an age when mass surveillance is becoming more prevalent, critics are naturally suspicious. But when governments elsewhere routinely collect personal data to issue ID cards, social security numbers and driver’s licenses, is what India proposing really intrusive or unreasonable?

Beyond India’s borders the country still suffers from an image problem. It’s true that grinding poverty, excessive bureaucracy, dodgy infrastructure and social immobility are deep-rooted issues that won’t go away anytime soon. But Aadhaar is an example of another side of this country – one that showcases the abilities of its people and allows them to potentially excel, despite the obstacles.

Important Information

Foreign securities are more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standards, and political and economic risks. These risks may be enhanced in emerging markets countries.

A version of this article originally appeared in the Telegraph on June 4, 2017.

ID: US-060617-33756-1