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India’s UID Platform
+ Kari Kohn
Nandan Nilekani, chairman of India’s Unique Identification Authority (UIDAI), recently spoke with McKinsey about India’s big new startup effort: developing a platform for unique, biometrics-based identification (UID). By 2014, India wants to have 500 millon residents connected to the system. At that time UIDAI also hopes to have the mobile phone infrastructure needed to verify identities and two or three major applications for services such as benefits transfers, banking, and public health. By moving the Indian economy toward a greater number of digital transactions, the UIDs can help to cut the costs associated with physical currency, reduce corruption, and promote wider-spread financial inclusion.
Our view is that even before we have property rights, you need identity rights. Because unless a person can identify himself or herself and have some sort of proof of existence, you can’t even talk about him owning property or owning a car or whatever.
So we think that they’re related. Just like property rights bring people into the formal economy, into the formal capitalism kind of stuff, identity rights are very, very important for people to participate.
Stern Professor Arun Sundararajan and Carlson School Professor Ravi Bapna conducted a first phase survey of the UID project in 2011 and the second phase is ongoing. As of mid-April 2012, 170 million residents have been enrolled, and so far, the results have been positive. According to Sundararajan:
The UID rollout seems clearly on track to fulfilling its intended goal of bringing entirely new segments of the population into the mainstream economic system. What’s important here is that we are not simply seeing people with pre-existing portable ID adding yet another one to their repertoire. Rather, millions of Indians who had no modern form of ID now have one, and this number is growing every month.
The UID is called “Aadhaar” which means “foundation.” The goal is to spur innovation throughout the public and private sectors through the UID database that will be “10 times larger than the world’s largest existing biometric database.” In a sense, it’s a meta idea that has the potential to reshape many public and private institutions. Nilekani comments:
There are a lot of things architecturally to drive scale, and we use a lot of innovative ideas in that. But what’s important is that we use innovation to build a platform. And then on this platform now, because of the open APIs and standards, we expect to see a lot of public- and private-sector innovation on top of this.
And to my sense, the best way to play the innovation story is that the government should really build the platforms but make [them] open in a way that individual creativity and entrepreneurship can build more solutions. In the US, to me, the two big examples are the Internet, which was originally conceived as a defense project, and GPS. Again, it was a defense project. Both these things, though they began as [part of] a government defense infrastructure, today are the basis for huge innovation. So we’re saying, having seen that, is there a way to architect [the digital ID] from day one to make it a platform for innovation?
Though on track, the program still faces hurdles. A Parliamentary Standing Committee on Finance recently rejected the National Identification Authority of India Bill, 2010 citing “concerns about privacy, identity theft, misuse, security of data and duplication during the implementation of the UID scheme…” The UIDAI has also struggled with India’s National Population Register over mandates and data collection. And, as with any fast-paced rollout, the program has encountered bumps in implementation. A case study commissioned by the Center for Global Development noted that the policies and logistics in some parts of India still lag behind the capabilities that the UID technology provides.
Yet the ambition and scope of the project, along with its early-stage success, have caused the rest of the world to take notice. Mexico, Argentina, and Brazil appear to be following the path that India forged and the UIDAI is now consulting on projects in Papua New Guinea, Mauritius, Australia, Indonesia, France and Columbia.