Aadhaar is the largest biometrics programme in the world. What started out in 2008 as an effort to create a national identification programme, soon became the world’s most powerful programme for driving inclusion.
The Aadhaar platform
Due to the way it was designed, Aadhaar opens up a range of applications for use on a large-scale. For instance, the Direct Benefits Transfer scheme where transfers of government programmes can be made directly into a beneficiary’s bank account by authenticating a user’s identity through Aadhaar, is being scaled up across the country, which promising results in terms of better targeting and reduced leakages.
Similarly, the eKYC service provided by Aadhaar, enables citizens to onboard themselves to various services, such as opening a bank account, instantly. Reliance Joi is today doing the KYC of its customers using Aadhaar, dispensing with complicated paperwork that was traditionally required to get a SIM card!
Aadhaar-linked payment systems, such as the newly launched ‘AadhaarPay’ and UPI, could transform the digital payments landscape in India. If you have an Aadhaar number, all you need is your 12-digit Aadhaar number, and a biometrics reader to do financial transactions. Thanks to Aadhaar, India could, in the next five years, leapfrog into a less-cash world, that no longer depends on debit and credit cards, expensive POS machines, ATMs and other such expensive hardware infrastructure.
Building on Aadhaar, is India Stack – a set of powerful, open and programmable application programming interfaces (APIs) comprising four layers – presence-less, paperless, cashless, and consent. Each layer is supported by different technologies such as Aadhaar authentication, eKYC, eSign, and Digilocker. India Stack, which can be used by governments, businesses, startups, etc. provides a unique digital infrastructure that can be deployed to solve several pressing national problems that require authenticated real-time information or money flows. The initial, most promising use case of India Stack has been around digital lending, which is showing considerable promise, as our recent analysis showed.
The journey for Aadhaar hasn’t been an easy one. Despite its promise, issues such as privacy and security have stood as concerns in the minds of critics. On its part, Aadhaar operates through a highly secure architecture with multiple levels of security to ensure that sensitive private information is protected. The newly enacted Aadhaar Act, makes considerable headway in legislating strict protocols on data-sharing as a safeguard to maintain user privacy.
With 1.08 billion citizens already enrolled, the ‘mandatory vs. voluntary’ debate on Aadhaar is now mostly a thing of the past. The value proposition of Aadhaar has been strong enough that people have voluntarily enrolled into Aadhaar across the length and breadth of India. In the next couple of years, Aadhaar will aim for universal coverage.
As told to Nash David
Varad Pande, Partner and Co-Lead of Financial Inclusion at Dalberg, is part of the founding team of Aadhaar, and was Special Advisor to India’s Minister for Rural Development between 2009-14
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