Aadhaar shows India's governance is susceptible to poorly tested ideas pushed by powerful people

This series has flagged a puzzling trend. State governments are struggling to use Aadhaar-based fingerprint authentication in ration shops. At the same time, a rising number of companies are integrating Aadhaar into their databases.

This is puzzling because from its inception, Aadhaar, India’s Unique Identification project, was pitched as integral to the modernisation of social welfare delivery in India.

Why is it failing at the job it was created for while proving useful elsewhere?

The answers vary depending on whom you ask. Former officials of the Unique Identification Authority of India, the government agency which issues Aadhaar numbers and manages the database, blame state governments and banks for poor execution of Aadhaar-based welfare delivery. State governments in turn blame banks and poor internet connectivity and the failures of biometrics-based technology.

These are – at best – incomplete explanations.

The roots of Aadhaar’s mission drift lie deeper.

In hindsight, it is easy to spot the critical moments which resulted in the paradox this article starts with.

The project’s origins

India’s desire to assign numbers to people had two beginnings.

The first, dating back to 2003, emerged from a security mindset.

“The Kargil war had just ended,” recounted a former official in the Unique Identification Authority of India in a conversation in 2014. “The BJP was in power and – partly due to Kargil, partly due to its worldview – it wanted every citizen to have a citizenship card.”

The official, who spoke on the condition of anonymity, said the idea was to start by identifying all residents – which eventually took the shape of the National Population Register – and then, identify citizens amongst the residents.

The second push for an identity project came in late 2008. The first term of the Congress-led United Progressive Alliance government was about to end. Welfare spending was rising. Bureaucrats in the erstwhile Planning Commission were worried about leakages.

According to a senior official in the Registrar General’s office, which was working on the National Population Register, an idea emerged of constituting an authority that would aggregate all databases of social welfare programmes to create a mother database.

Such a database would “weed out ghosts and duplicates so that a person who gets the LPG subsidy doesn’t also get the kerosene subsidy,” explained the former official of the Unique Identification Authority of India. The bureaucrats wanted a mechanism for “deduplication”. They felt some people had enrolled multiple times in the government’s welfare programmes – for instance, by changing the spelling of their name or their address. The government was seeking a way to remove these duplicates.

According to the former official of the Unique Identification Authority of India, the proposal drawn up by senior Planning Commission officials envisaged a massive organisation the size of the home ministry. It was expected to have 36 joint secretaries. The design would be similar to that of the Election Commission with one joint secretary in every state and others coordinating with the central government. “The secretary of the Planning Commission, who was retiring soon, was tipped to head the new body,” he added.

This proposal, said the official, went to the Union Cabinet in February 2009.

At this stage, there was no talk of biometrics.

Enter Nilekani

That plan changed once software entrepreneur Nandan Nilekani came on board.

According to a former cabinet minister in the government, around May 2009, when the Lok Sabha results were expected, Congress dynast Rahul Gandhi asked Nilekani to join as the Human Resources Development minister.

That offer fell through – he was seen as too controversial a choice.

Prime Minister Manmohan Singh then asked Nilekani if any other role in the government interested him. He picked the job of the first chairperson of the Unique Identification Authority of India.

A set of initial conversations followed between Nilekani and other technology entrepreneurs like Shrikant Nadhamuni, who had worked at firms like WebMD and Silicon Graphics. The fledgeling team decided to junk the idea proposed by the Planning Commission, calling it impractical. Taking details from the voter database and matching them against another database was “not implementable at all,” said the former official of the Unique Identification Authority of India. “How do you do it? Hundred guys have the same name.”

The team felt the only way forward was deduplication through biometrics.

It was a leap of faith. Biometrics had been used in other countries but on a much smaller scale. “We spoke to techies and top computer guys and they said ‘Yeah, it has never been done before but we think it is doable,’” said the former official.

The early conceptualisation

At this time, while working on the proposal they would take to the cabinet, the team made two other bets.

One, it decided to create an authentication system for Aadhaar – so that the number could also be used to establish that a person was who he or she claimed to be. Explaining this decision, the official said: “If something is not very useful, it will not get used. Like the voter identity card which just sits on a shelf.” Instead, Nilekani and his techies wanted something “embedded in everyone’s life”.

Two, the team focused on making the project useful for financial inclusion by building Aadhaar-based payment mechanisms – Aadhaar Payment Bridge and Aadhaar Enabled Payment System. The Payment Bridge was a list of beneficiaries’ Aadhaar numbers and the primary bank account into which their welfare entitlements would flow. Since biometrics would ensure that no person had more than one Aadhaar number, the Payment Bridge would help remove duplicates.

The Aadhaar Enabled Payment System, on the other hand, was meant to verify the beneficiary. At the time of collecting payments, for instance, a NREGA worker would have to submit his fingerprint and Aadhaar number. The team conceptualised a system where this information would be sent to the Authority’s server asking it to verify if these fingerprints and the number matched.

This focus on financial inclusion, said Pramod Varma, a former Infosys employee who returned from the United States to join Aadhaar as its Chief Technology Architect, in a conversation in October this year, was one way to ensure government support for the project would stay high.

“We needed to find a need which is very desperate,” he said. “That is important for a product to succeed. This proposition helps build support for the programme.”

That said, the team did not want Aadhaar to be used only for government programmes. In a conversation in October this year, Nilekani said: “Government schemes work if you universalise them. When upper class Indians leave a system, it weakens. When they stopped sending their children to government schools, they became a disaster.”

For this reason, he said, “If we used Aadhaar only for PDS [public distribution system of food rations], then there would be no pressure to keep it working fine. Increasing the number of people using Aadhaar is a way to keep the system honest. Because the underlying architecture is the same.”

The team decided to create an API-based architecture. API stands for Application Programme Interface, which allows institutions to open up their technology for others to use. An API-based system for Aadhaar would let even private companies post authentication queries, widening the uses of Aadhaar beyond welfare delivery.

Said Nilekani, “The more the use of Aadhaar, the less likely the project is to be repealed.”

The underlying assumptions

Two things are notable in the way the team worked.

First, the technological ambition.

“We were not here to do one more IT project,” explained Varma. “Instead, if we could create digital identity as a usable instrument, then we could create something very exciting.”

But it is not clear if that vaunting technological ambition was needed to meet the more mundane requirements of the government.

The other notable feature in the way the team worked was its disdain for the government as something that is fickle, loses interest and lets projects go to seed. Determined that their creation would not meet a similar end, the team had created a model that would let private companies use Aadhaar.

With that, however, the project entered fraught waters. “People had given their biometrics for a particular reason,” said IIM Bangalore professor MS Sriram. “They were told Aadhaar was needed to access welfare delivery.” Can this information be used, he asked, by companies offering products and services?

These questions escaped close scrutiny by the government. This blueprint, presented to the cabinet in August 2009, was approved. Enthralled by technology, and desperate for a solution to a long-festering administrative problem – leaky welfare delivery mechanisms – the government fell back on technology that was untested.

“Somewhere along the way, a lot of people got convinced that this is a good idea without actually understanding why,” said Abhijit Sen, a former member of the erstwhile Planning Commission.

Aadhaar and Cash transfers

What strengthened the project further was the government’s push for cash transfers.

In 2011, then Finance Minister Pranab Mukherjee announced that India would replace the existing subsidy model for fertilisers, kerosene and Liquid Petroleum Gas with cash transfers, officially called Direct Benefit Transfers.

Nilekani was appointed as the head of the DBT committees. He proposed that Aadhaar be used to authenticate the beneficiaries and payments were made to banks through the Aadhaar Payment Bridge.

But it was untested whether Aadhaar-based welfare delivery was superior to India’s existing welfare delivery mechanisms. Although these mechanisms were far from perfect, as Sen, the former planning commission member said, they had “working protocols and well-defined standards”. Not to mention grievance redressal mechanisms which the poor were familiar with. Before replacing the existing systems, it needed to be proved that the new model was superior. Those studies were not done. “There was no independent evaluation,” said Sen.

Both Nilekani and the UPA were in a hurry, Sen added. Nilekani knew that unless the identity project got a big push, it would die. His approach, as Sen summarised was: “All other issues we can look at later.”

A big source of resistance within the government was P Chidambaram, the Home Minister, who raised questions over Aadhaar’s conflict with the National Population Register, a project that his ministry was implementing. Most people suspected this was an extension of Chidambaram’s turf war with the Finance Minister Mukherjee.

But the Congress had its own compulsions. It felt a mounting panic as the 2014 elections neared. Unlike its first term when it had passed the National Rural Employment Guarantee Act, the Right To Information Act and the Forest Rights Act, its second term had little to show. The party pinned its hopes on cash transfers to reduce leakages and to blunt the corruption tag haunting the party.

But the pilot projects using Aadhaar for cash transfers in fertiliser and kerosene were not successful. Another pilot involving NREGA payments in Jharkhand failed to scale up as well. The reasons ranged from poor connectivity, fingerprint failure to more social ones like caste, gender and political favouritism. Despite that, the government decided to roll out Direct Benefit Transfers in 43 districts.

In December 2012, this reporter sent a questionnaire to then rural development minister Jairam Ramesh asking about the parameters the government had identified for gauging success or failure of Aadhaar-based DBT. His response, on email, was: “Your questions are for a doctoral thesis and answers can only be provided as we go along.” It was a confounding answer – as far from evidence-based policy making as one can imagine.

Much of this was adventurism, said Sen. Aadhaar-based cash transfers were “costlier and more ambitious than thought earlier”. But the Congress pressed ahead. “It was a political party decision”, he said, not a government decision on how to deliver welfare.

Things came to a head in Rajasthan. Desperate for a magic bullet for the impending state elections, the Congress state government announced that soon only those with Aadhaar cards would be able to access state welfare programmes in Rajasthan. As things turned out, the Congress lost the elections. After that, the party began pulling back.

A new government

In 2014, the Bharatiya Janata Party came to power at the Centre with Narendra Modi as prime minister. For a while, it was unclear where Aadhaar was headed. During the campaign, the party’s leaders had repeatedly pointed at flaws in the project and promised to shutter it.

The Unique Identification Authority reported to the Planning Commission, “which itself was looking shaky under the new government,” said the former official. The home ministry, now headed by Rajnath Singh, tried to get the Authority transferred to it.

In response, in the first week of July, Nilekani, whose term at the Authority had ended, met Finance Minister Arun Jaitley and Prime Minister Narendra Modi. Four days after that meeting, Modi made his first public statement backing Aadhaar. Five days later, Jaitley, in his Union Budget, increased allocation for the Unique Identification Authority of India from Rs 1,550 crore to Rs 2,039 crore. The push on Direct Benefit Transfers was revived as well.

Since then, Aadhaar’s uses within and outside the government have multiplied. Other patterns like an indifference to field realities persist. With the design of the Application Programme Interfaces being led by non governmental organisations like iSpirt, there has been little open discussion about their design, possible downsides, or usability in a country where a large part of the country is not digitally literate.

Aadhaar and India’s system of governance

India’s experience with Aadhaar raises large questions about the Indian state’s capacity to execute a large, complex project.

The project escaped close examination within the government. Much rode on the reputation of Nilekani, who leveraged his reputation to meet chief ministers, bank officials and others, and build acceptance for Aadhaar.

The former official of the Unique Identification Authority of India categorises this as India’s “weak system” problem. “Only people with great social capital can navigate this (system) and make some headway.” In other words, a Joint Secretary with a good idea might not be able to see it to fruition. But a bad idea, driven by powerful people, will go through.

As Aadhaar became deeply entrenched in the government, fundamental questions on whether the technology works, the consequences of tagging a unique number to everyone, and the privacy issues that come with it, found little discussion – and continue to get little discussion even now.

This is the sixth part in a series on the expansion of Aadhaar and the concerns around it. Read the other parts here.