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v t e

Unique Identification Authority of India (UIDAI)

UIDAI (Aadhaar UIDAI new logo)
Agency overview
Formed	January 2009
Jurisdiction	Government of India (Union Government)
Headquarters	New Delhi
Agency executives	Nandan Nilekani, Chairman Vijay S Madan, Director General and Mission Director
Website	uidai.gov.in

The Unique Identification Authority of India (UIDAI), is the government agency of India which is responsible for implementing the Aadhaar identification program. It operates the Unique Identification Number database and provides identification numbers to all residents of India on voluntary basis. The UIDAI was established in January 2009.

The Unique Identification Authority of India functions under the Planning Commission. The head of the agency, currently Nandan Nilekani, is ranked equally to a cabinet minister.

Overview

UIDAI is the Registrar of Identities i.e. it registers, assigns and verifies the unique identities. It is supposed to register two types of unique identities:

• Residents of India (called Aadhaar)
• Corporate entities (Corporate-UID) for company, bank, NGO, trust, political party etc.

So far UIDAI has made progress on Aadhaar Number (AN) only. Work on Corporate-UID is yet to be published.

However, Corporate-UID has been provisioned within 12-digit UID number system. Corporate-UID is supposed to produce the similar effect as Aadhaar for corporate entities i.e. identification and traceability of transactions. It is supposed to bring transparency on financial transactions, donations; and to prevent corruption, money laundering, benami transactions (i.e. under a fictitious name), allocation of natural resources like land, spectrum, mining of sand, iron-ore, coal-blocks, etc. Similar identifier ISO 9362 (Business Identifier Code - BIC) exists for international business transactions (financial and non-financial).

UIDAI owns and operates the main database server called the Central Identity Data Repository (CIDR). Aadhaar enrollment commenced in September 2010.

Aadhaar serves the purpose if Aadhaar-holder verbally tells the AN and it gets instantly verified online at the point of service, through KYC or E-KYC process in a paperless way; which provides high reliability of identity. Only show of paper Aadhaar letter provides low reliability of identity as it can be easily faked.

Aadhaar program has already crossed the critical-mass as of 15-Aug-2013 by assigning 400 million AN and linking over 30 million bank accounts for Direct Benefit Transfer for various social security benefits across many states.

Half-a-billion AN will be assigned by end of November-2013. Half the population of India (600 million) will be assigned AN by March-2014. By 01-Jan-2014, half the population of India (289 districts across various states) will be covered under Aadhaar-DBT for various benefits.

Aadhaar program is the largest biometric database in the world. Currently it has 500 million people (5 billion fingerprints, 1 billion iris image, 500 million face photo) with 6 peta byte of data. It will reach 1.25 billion people in few years, 15 PB of data and over 200 trillion biometric matches per day.

Properties of AN

Aadhaar Number (AN) is a 12-digit national identification number assigned to residents of India for lifetime. Its format is 1234-5678-9012 where the 11-digits are used as a sequence and the rightmost 1-digit as an error detection check-sum. It is not a proof of citizenship. It only guarantees identity; not rights, benefits or entitlements. AN is a digital identity, instantly verifiable online at the point of service (PoS), at anytime, anywhere, in a paperless way. It is assigned only to humans, not to corporate entities like companies or non-governmental organisations, unlike the PAN card. The government expects that it will enable under-privileged people to access basic rights and social security benefits, which they have been deprived so far due to lack of identity.

AN is designed to enable government agencies to deliver retail public services securely based on biometric data (fingerprint, iris scan and face photo), along with demographic data (name, age, gender, address, parent/ spouse name, mobile phone number) of a person. AN is portable, free from limitations of physical presence of a person at a given place. Thus is can be used for casting vote from anywhere using mobile phone or personal computer, availing social security benefits from anywhere e.g. drawing PDS ration from any shop etc.

AN also works as a financial address, i.e. it works as a bank account number. This is designed to help spread low cost, ubiquitous, branchless banking services in rural areas - called micro-ATM, as part of the Financial Inclusion initiative.

AN is valid all over India as a proof of identity, age and address. It is immensely helpful to migrant workers for employment and social security benefits. In case of change of personal information (mobile number, residence), the same can be updated with proof at Aadhaar Kendra, the permanent field-office.

AN is stored in a centralized database (CIDR) and linked to the basic demographics and biometric information – photograph, ten finger-prints and both iris – of each individual. It is verifiable online with the database server (CIDR) instantaneously, at a low cost. It is portable and robust enough to identify duplicate and fake identities from government and private databases. It is a randomly generated number, is sparsely populated in the database, designed not to be guessable, with no associated intelligence, and no profiling information such as caste, creed, religion or language. Since Aadhaar uses 11-digit for sequence, therefore it has an address space of 10 (100 billion). So AN can be assigned to 100 billion residents, and is designed not to get used up in the next 500 years. Upon the death of a person, the database record is marked as 'inactive', but is never deleted.

UIDAI operations

Rationale and goals

In order to avail social security benefits as well as government-regulated services (e.g. bank account, insurance, mobile SIM, driving license, vehicle registration etc.); compliance to Know-Your-Customer (KYC) conditions are mandatory. The minimum KYC consists of 3 proofs:

• Proof of Identity (name with face photograph),
• Proof of Age (date of birth or estimated age),
• Proof of Residence (presently staying).

As of November 2013, India has population of 1.25 billion, about 1 billion mobile phones, 640,000 villages, 75% literacy, 2.5% (30 million) income tax payer, 4% (50 million) passport, 12% (150 million) driving license, less than 20% (250 million) banking, 33% (400 million) migrant laborers and 60% (750 million) very poor people i.e. they live under Rs.100 ($2) per day income and starve at least one meal everyday. About 80% (1 billion) people do not hold identity documents to satisfy minimum KYC.

The Union Government spends Rs.3,000 billion ($50 billion) on various social security subsidies (see table below 'Social Security Budget 2013-14'). In addition, various state governments also spend on specific social security programs. As per various estimates, about 40% to 85% of social security benefits have been plagued with fictitious and multiple identities due to lack of standard identity system that is verifiable instantly at the point of service.

Provide identity

Out of 1.25 billion (125 crore) population of India, over 1 billion (100 crore) do not hold identity documents to satisfy minimum KYC.

There are over 400 million migrant laborers (internal) who are poor, landless, not educated or illiterate. These migrant workers do not exist on the government's databases, despite having worked for years in another district of the same state or another state of India. Lack of identity prevents them from basic rights and social security benefits.

The prime objective of Aadhaar is to provide lifetime digital identity which is verifiable instantly at the point of service with biometrics in paperless way.

Provide social security benefits

Aadhaar-platform is aimed at providing social security benefits based on eligibility thru direct benefit transfer. It provides access and options to rural and poor people. It helps bring transparency and eliminate corruption, leakage and inefficiency.

The following table shows financial size of the social security benefits funded by the Union government of India. The table does not cover other programs operated by various State governments:

Financial Inclusion

Aadhaar-enabled Bank Account (AeBA) is a Basic savings account (zero-balance) where a Debit-card is issued and Aadhaar number is used as the account number. It can be instantly opened (like prepaid bankcard). Transactions operate with fingerprint authentication only; as indicated by Aadhaar-logo on the card. PIN is not issued to zero-balance AeBA because it is aimed at financial inclusion of unbanked, illiterate and rural people. Bankcard operates at micro-ATM and other ATMs equipped with fingerprint scanner. Presently passbook is not issued to these accounts due to infrastructure problem. Transactions like deposit, withdrawal, transfer, balance-check can be performed. AeBA is used for direct payment of social security benefits such as pensions, scholarships, NREGA wages, healthcare, subsidy for LPG, kerosene, PDS ration, fertilizers etc.

Generally, a micro-ATM consists of a laptop computer or smart-phone equipped with 2G-internet, fingerprint scanner, receipt-printer, speaker and power backup (solar / battery). It is human-operated by commission agent called Banking Correspondent (BC) so that illiterate customers do not face problems of ATM machine operations. BCs are generally chemist-shops, provision shops or mobile-vans. It is similar to the commission agent model of prepaid mobile phone recharge.

Some banks issue photo-bankcards, that are boon to rural people and migrant workers because it works not only as bankcard but also as identity card. RuPay card by Indian payment-bridge NPCI and Saral Money Visa are two prominent AeBA bankcards.

Once bankcards become common in rural areas, then whole India will become a nation of cashless-transactions with higher transparency and accountability.

India is not the first country to implement the banking service for rural and under-privileged. It is being implemented after studying various banking systems in the world which have been successfully operational for the past several decades. Some of theses countries are Bangladesh, Philippines, Korea, South Africa, Kenya, Brazil, Mexico, Chile etc.

Aadhaar-enabled Service Delivery

Various financial as well as non-financial services are being made Aadhaar-enabled, called Aadhaar-enabled Service Delivery (AeSD) in phased manner. By 01-Jan-2014, half the population of India (289 districts across various states) will be covered under DBT for subsidized LPG. By August-2013, 6.3 million duplicate connections were detected by Aadhaar-seeding and cancelled. Thus government saved $1 billion on reduced import by mid-2013.

Following is the list of AeSD. By default, Aadhaar is optional unless stated compulsory for a given region.

Aadhaar-DBT

Aadhaar-Direct Benefit Transfer (DBT) is an Aadhaar-enabled financial service used for direct payment of social security benefits into the bank account of the Aadhaar-holder.

An existing bank account can be enabled as AeBA by seeding (linking) it with Aadhaar number. Seeding makes mapping information stored onto NPCI payment-gateway, that facilitates the subsidy payment. The seeding helps identify the genuine and eligible beneficiary, and prevents duplicate and non-existent (fake, dead) persons.

Eligibility of beneficiary is applied based on rules and is cross-checked with other related databases which are also Aadhaar-linked. This approach is designed to improve the audit trail, add efficiency; prevent corruption, middlemen and delayed payments; eliminate non-existent, duplicate and ineligible beneficiaries. It results in direct benefit access to the eligible people; and saves multi-billion rupee from corruption annually.

e-governance

Another objectives of Aadhaar Number (AN) is to use it as an effective governance tool - to bring transparency, efficiency and weed out the bogus beneficiaries from social security programs e.g. social security pensions, scholarships, public health, NREGA, subsidy on PDS Ration, Kerosene, LPG etc. Thus Aadhaar is expected to save public exchequer from bogus beneficiaries up to Rs. 1.1 Trillion (Rs. 110,000 crore) by the year 2020 as per study report of National Institute of Public Finance and Planning.

In 1980s pointing towards the widespread corruption in social security programs in India, the then Prime Minister Rajiv Gandhi had made a famous statement in Parliament that only 15% of benefits reach the poor people; the remaining 85% are eaten-away by the corrupt officials and middlemen. Similarly, the World Bank Chief said that Aadhaar will help eradicate poverty in India.

The stand-alone databases of social security services can not interact with each other due to lack of a unique identifier like AN. Thus stand-alone databases do not have ability to detect and prevent fictitious and ineligible beneficiaries. Therefore, AN is aimed at eliminating retail corruption in the public domain which has affected social security programs since independence. In India, about 750 million (60%) people starve everyday for at least one meal.

Prevention of corruption

Although Aadhaar can prevent retail-corruption to much extent, yet it is not capable of preventing wholesale-corruption like allocation of coal-blocks, 2G spectrum, mining of Iron-ore, sand, onion hoarding etc. Corporate-UID is required to prevent such wholesale-corruptions and this provision is already inbuilt in UIDAI Number System, yet implementation is pending.

Prevention of identity fraud

Identity frauds such as identity theft (using the identity of another person, dead or alive) and identity document forgery (fake IDs created on fictitious person, also called benami) has been a common practice in India. The scan, super-imposition and color-print functions of ubiquitous printers have made paper-based and plastic card-based frauds much easy. Identity fraud is committed for financial gain or due to compulsion. Identity fraud committed for financial gains are mostly benami companies and benami bank accounts used for bribery and money laundering. Identity fraud committed on compulsions is either due to lack of a person's own ID documents, or due to the intention of not using one's own ID.

In the telecoms sector companies paid a Rs. 7 billion (Rs. 700 crore) penalty to the telecoms regulator on fake KYC IDs in 2011. The examples also can be used to other areas such as PDS ration and kerosene, subsided LPG, welfare pensions, scholarships etc.

There are 400 million workers who work in other states (internal migrant workers) in unorganized sectors like construction and farming. They need mobile phones to keep in touch with their family and employers. They do not possess minimum KYC IDs (Proof of Identity, Proof of Age, Proof of Residence) to procure a mobile phone SIM card. Telecommunications service providers (TSP) in India ask for minimum KYC IDs, where the Proof of Residence (PoR) must be the local address only. Since they normally stay in shared shanties without any valid documents, they cannot produce PoR. So they fraudulently purchase available IDs of other persons at a high price in order to obtain a mobile SIM. Prisoners, criminals and terrorists never procure mobile SIMs using their own IDs due to obvious reasons of getting tracked.

The employees of TSPs are generally under pressure to achieve sales targets. Hence there are cases where one set of IDs submitted by a genuine customer to procure just one SIM has been reused 100 times to issue 100 SIMs fraudulently.

Some photocopy shops fraudulently scan and make extra copies of identity papers and sell them at a premium, leading to identity fraud. Some prospective employers do not destroy the papers of rejected candidates, and some times that goes into wrong hands leading to identity fraud.

Employees' Provident Fund Organisation of India frauds can be prevented if its Aadhaar linking is not opposed.

Aadhaar E-KYC is designed to solve the problems of identity fraud. Telecom companies have started adopting it to avoid KYC penalties.

Website

The UIDAI website currently operates in five regional languages: Bengali, Gujarati, Kannada, Marathi, and Tamil, in addition to Hindi and English. It is planned to add five more languages at a later stage, Assamese, Malayalam, Oriya, Punjabi, and Telugu.

See also

• Aadhaar
• National Population Register

External links

• Official Website of UIDAI

References

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