'UID Is Like iPhone'

Only 30 per cent of Indian households boast of having at least one member with a ‘portable identity’ like a Passport or a Driving License. Such an identity, points out the economist from New York, is necessary for access to institutions and credit, which is why the biometric based Unique Identification (UID) project is going to be a game-changer. An alumnus of IIT, Madras,, from where he obtained a B.Tech degree in Electrical Engineering, Arun Sundararajan secured a degree in Management and a Ph.D. from Rochester. A Professor of Information, Operations and Management Sciences at Stern School of Business, New York University, he is an economist who researches how technology transforms business and society. He was on a short visit to India this month when he spoke to Outlook on the Unique Identity (UID) project.

Any particular reason why you chose to study ‘Adhaar’ or the UID platform ?

We were fascinated by the scope and ambition of the programme. We no longer find projects like this in the United States, for example. It has a ‘Moon-shot’ feel. UID is a digital infrastructure that seeks to connect people with economic institutions. People’s increasing access to institutions like banking, health services, insurance will have an impact, we believe, on the GDP of the country over the next decade. It will of course take longer for the full impact of the UID to be felt.

You have had the Social Security Number in the US for a long time now. So, how is UID any different?

For one thing, UID is far more advanced than anything we have seen anywhere so far. Secondly, unlike the Social Security Number or any other Identification project, UID is not tied to only identification or any one government service. It is designed as a platform to which applications can be integrated over a period of time. It is also by far the most advanced concept of identity in the world.

But UID has given rise to serious misgivings in India, with many critics questioning the technology itself. How do you react to such misgivings ?

There may be a feeling in India that UID is not going to work. And apprehensions to anything new are both valid and natural. But there is also a healthy respect for technology in India and there is belief in Information Technology (IT). And UID is an IT-based infrastructure. We are optimistic on several counts. In this case the government is not just putting up the infrastructure but also blueprints for how it will work.

The government also had various options for enrolment. It could have been done wholly by government agencies or wholly by the industry. But UID chose a middle ground and combined the benefits of both. I am impressed with the quality of thinking that has gone into it. The PPP model, which required training 1,00,000 people first and then allow the private sector to hire them for the enrolment worked very well. 

What are the findings of the survey so far?

We have studied the first batch of data from 2011. The data from 2012 will come in now. Two findings surprised us. One was that 70 per cent of the households which opted for UID enrolment had no portable identity at all till then. They may have had ration cards but they are not portable like Passports are. And not a single member of these 70 per cent households had any such identity. We were also curious to know whether the enrolment was drawing the ‘haves’ or the ‘have nots’. And the survey showed that more than half of the enrolment was among the weaker sections of the people, who were receiving some kind of identity proof for the first time. Half the country has no access to bank accounts and the UID has the potential to change that.

How do you expect the UID to influence the lives of people?

The well-being of the people cannot improve overnight just because they have a portable identity. Technology is not a magic bullet. But the UID platform is going to emerge over time as the most effective general purpose service platform. As more and more people get to use it, more and more applications will start getting attached to it. The blueprints already demonstrate how it can be used to access the banking system for transactions or how it can be used to open a bank account or get a mobile phone connection. It will be a long and slow process.

There are privacy issues and worries over the government introducing an intrusive system to pry into people through UID. Do you endorse such concerns?

Such worries are normal. Privacy issues must be thought out carefully because there could always be unintended consequences. When I had to submit my fingerprints for the US Green Card, I too felt uneasy. But then it is not your soul, just an image. Moreover, privacy concerns must be weighed against civil rights that people may not have, a proper identification in this case. So, the benefits may outweigh the costs.

Will UID applications be largely driven by the government or the private sector ?

Applications will largely come from the private sector, I believe. At this point, UID is possibly a year away from being sufficiently low-risk to allow venture capitalists to fund experiments and entrepreneurial forays. But the future is promising.

I collaborated with the Indian School of Business, Hyderabad on a UID-based Business Plan contest. There were 40 projects, some of them submitted by companies like Microsoft and Wipro. I remember a project which integrated the UID with a dispenser so that the required quantity of foodgrains is automatically released by a dispenser once the beneficiary is authenticated by the UID, without any human intervention. Remember, these are early days yet. 

I also believe that over a period of time, most government disbursals are likely to use the UID platform. And it is likely to reduce leakages. But for that to happen, the government agencies, their working style etc., will have to change. People need to be trained and so on. It is a time-taking process.

Can you think of some of the future applications of UID?

Well, electronic medical records, for example. There could be a range of education applications. Some private entity is certain to build a national credit history also. The UID platform is like the iPhone. More people use it, more the applications that are created and downloaded.

Is the government’s plan for ‘cash transfer’ or Direct Transfer of Benefits a knee-jerk reaction, a case of putting the cart before the horse ?

I think it is an important step forward. For platforms to be successful, the eco-system has to be healthy. It is a chicken-and-egg situation. Unless people believe that UID will be beneficial, why would they enrol ? iPhone applications were developed because the iPhone became so popular. Mastercard and Visa are accepted because of the belief that they will deliver. Some commitment from the government, therefore, is important for the growth of the platform. Some times the cart has to be put before the horse or else there will neither be a horse nor a cart.

How important is a legislation for use of data ?

The United States has a set of elaborate guidelines for use of health data though the European Union countries have stronger legislations on the use of data. To their credit, the UIDAI has thought very carefully over both data ownership and data access. Therefore, India has the opportunity to deal with it afresh.

The real privacy concerns are the use of data by the private sector and even in the United States, such guidelines are sorely lacking. With our increasing use of mobiles and computers, with the increase of electronic transactions, the private sector would be collecting a lot more data than the government. Even today, the governments are forced to approach Google and Facebook, which have more information about us than any government agency. A legislation is, therefore, necessary.