The Importance of Being Aadhaar


The world’s single largest digital identity program with biometrics – Aadhaar that provides proof of identity to over 879 Million people of India (as reported on 8-July 2015) is in the news again. This is because, the country’s Supreme Court is reviewing one more time, a bunch of objections raised in the public interest, and equally important – a petition by the Government of India itself – whether Aadhaar can be accorded a clear and unambiguous legal status, which has so far not been forthcoming.

Launched on the 28th of January 2009, Aadhaar is proving to be a success in many practical and utilitarian ways. However it is unlikely that the number of arguments for and against it will go away in a hurry, but for now, the program ambles on nevertheless. For those not familiar with the India’s Babu-dom (bureaucratic administration) and how people engage with it – the current ambiguous situation leaves them holding their breath, but first let us examine why Aadhaar works so well in so many different ways.

Most obviously first, it covers a really large number and it contains biometrics of each individual and thus at a touch of a button, it can verify the identity of any person living in India, registered so far, unambiguously.  Till now this could only be done physically – by visiting the individual and having witnesses to vouch for the person. As in the case of the notoriously slow verification for a passport applicant, which is done in this manner, the average time taken is forty nine days, even today.

Second, Aadhaar has directly cost the Government of India, only about seventy five Rupees per individual (Euro 1.06), and perhaps most significantly, the reduction in cooking gas subsidy – being shifted from producer to consumer using Aadhaar – alone will be able to pay back for the entire program – in less than two years.


To understand how this figure has been arrived at and the underlying assumptions, one has to go back to its precursor identity system – the ration card, which was family based, and thus represented households, where the most prevalent means of cooking in India is Liquefied Petroleum Gas (LPG) that is primarily bottled and distributed through public sector oil companies. Economically weaker households still use kerosene, however in significantly lesser numbers today. Till recently, many marketing and distribution channels in India were modelled on a command economy, and thus, in order to meet its policy obligations of subsidizing energy supply for household cooking, the Government reimbursed the oil companies (supply-side subsidization) the difference between an artificially fixed low retail price and their actual costs of production and distribution, for every cylinder of LPG produced. This system was initiated in the 60s and worked well, till oil and natural gas prices rose steeply, and the subsidy bill became exorbitant.

The household gas cylinders are filled with 14.2 Kilograms of LPG and on an average lasts one month for a household of four or five persons. Today this is sold for Rupees 417 (Euro 5.91) and through a very transparent and public exercise, the cost of production has been worked out to 621 and that of distribution to 51 and thus the total to Rupees 672 (Euro 9.53). Therefore the subsidy per cylinder is worked out to Rupees 255 (Euro 3.62) – a figure that is held constant for a financial year (April to March in India), and then re-worked for the next budget horizon.

Two things happened simultaneously over the last year. First, Aadhaar enrolment reached a critical mass, and one of the objectives of introducing it was to provide Direct Benefit Transfer (DBT) or consumer-side subsidization. Pre-Aadhaar (or pre-DBT), there were approximately 153 Million households (having ration cards) and who would be delivered a theoretically unlimited number of LPG cylinders.

With the introduction of DBT, consumers would now be reimbursed only for the cylinders they purchase, and limited to one per month (or twelve per year) and the subsidy amount deposited into their respective bank accounts. Mass electronic bank transfers make this possible. However, with the need of an Aadhaar-based identity, against the existing 153 Million, only about 126 Million households registered. It is reckoned that the dropping of 27 Million households was largely due to ghost entries that had been set up to purchase additional gas cylinders to be sold in the black market (to hotels, restaurants and commercial establishments). However, it also possibly includes households with no bank accounts, duplicates as well as some that might have voluntarily opted out, which could be true for households with reasonably affluent levels of income.

It is important to note that while all this was being implemented, it was declared that Aadhaar was no longer a compulsory instrument for availing DBT, thus all that remained of the system was that the distribution agency verified your address and your bank account particulars, and if a cylinder was delivered, it would kick-off a series of transactions that would result in Rupees 255 (Euro 3.62) arriving into your bank account.

For the current financial year of the Indian Government (April 2015 – March 2016) a total of Rupees 21,140 Crores (Euro 2.99 Billion) has been provisioned on this account. During the previous year, the figure for cooking gas subsidy stood significantly higher at Rupees 48,755 Crores (Euro 6.92 Billion) that shows an impressive reduction of Rupees 27,615 Crores (Euro 3.93 Billion). Is all this due, solely to Aadhaar? Not really.

The largest portion of the reduction is due to the sharp decline in petroleum prices, with the unit subsidy being adjusted from Rupees 40 (Euro 0.57) to 18 (0.26) per Kilogram of LPG – a 122% reduction. As it is explained, the reduction due to introduction of DBT is only about Euro 700 Million – still quite substantial, which would of course have been much higher, had the petroleum prices not slumped.

As Aadhaar verification is no longer mandatory for the scheme, opinion is divided if even this figure is attributable to the identity program. However it must be stated that there is a strong public perception that Aadhaar works – as it led to DBT in the first place, and thus transfer through bank accounts. A useful collateral has been that many more households now having bank accounts, and thus fulfil an important milestone towards yet another socio-economic objective – that of financial inclusion.


It is now proposed that DBT also be deployed for a number of other government welfare programs such as – health insurance, retirement pensions, employment guarantee and housing subsidies among others – all linked to individuals (and their socio-economic status) and are being clubbed together under the Pradhan Mantri Jan Dhan Yojana (Prime Minister’s People’s Fund).

The Government also has a substantial food subsidy bill, a large part of which is reimbursed through supply-side subsidization (fertilizer manufacturing companies in particular) as well as controlled wholesale procurement prices for food-grains. How this can be turned around to a consumer-based model remains to be seen and could be more complex than LPG-DBT. Without going into figures, it is reasonably evident that as the financial outlay would be much higher, so would be the risk.

It is in this wider context that the question is being asked – can the agencies fully depend on Aadhaar? This question is an important one, and petitioning the Supreme Court of India alone will not provide a final and conclusive answer.


First, there is the issue of data quality. While the deeper issues of biometrics, like the propensity to either falsely accept or reject identities have been systematically managed in Aadhaar, anecdotal disclosures has revealed that spelling errors alone prevent any significant matching to be done, leave alone errors in dates, genders, authenticity of photographs and even standardization of place names and postal codes.

Another question that will require a hard look before long is – does Aadhaar place too much reliance on biometrics alone? As of now, just the fingerprint and iris biometric matching is not providing all the answers that administrators are seeking, something that a more judicious mix of data and biometrics can provide. As a result, Aadhaar reportedly matches very sparsely with the other large identity databases in India – especially the census records (more of this later), the electoral rolls (which do not have biometrics) and even smaller, older and well-established systems such as the PAN (Permanent Account Number) for Income Tax. Ironically, the PAN database has about 140 Million identities, of which only 34 Million actually filed returns and paid tax in 2014, and thus there are unresolved questions of whether the balance 106 Million are ghost entries, duplicates, deceased persons or others, such as those falling outside the tax paying bracket.

Historically, the Election Commission of India were the first to issue an Electoral Photo ID Card (EPIC) in the mid-nineties. The official electoral roll for the 2014 general elections stood at 814.5 Million and it is estimated that the number of EPICs is possibly larger. Currently, the EPIC is afforded very little recognition (even for voting purposes) and the exercise of “seeding” the electoral rolls with Aadhaar has begun, but once again with very sparse correlation between the two.

Navigating their way through these multiple imperfect systems, a common refrain has been the need for more effective means of searching through data – whether it is names, family names, dates, relationships, households, locations and reference (breeder) documents. For now it seems that the more subtle pattern of similarities among them is what gives the most reliable indications about identities in such large numbers, and in cases of comparing identities between two databases, if only one has biometrics, it is of little use.


Yet, it is important to note that the Aadhaar program not only provides the best opportunity for India to better manage its welfare programs, but is also being looked upon as a viable model for other developing countries to replicate. Alan Gelb, a former senior World Bank economist, who specializes in the study and impact of Identity programs on socio-economic development, categorizes Aadhaar as a foundational identity program, around which any number of functional programs (pensions, subsidies, health etc.) can be structured. He has gone on to research and analyse different models and concludes that Aadhaar has all the ingredients to be immensely successful, and is replicable, especially in Africa where the next generation of identity programs are expected to leapfrog the continent into a higher developmental orbit.

Also recently, at The Hague Colloquium on legal Identity (21-24 April 2015 at The Hague in the Netherlands, refer over thirty invitees – economists, historians, social scientists, scholars and practitioners from all over the world – presented papers, and every third paper either had Aadhaar as its main topic, or made a significant reference to it. Surely, this reflects trends elsewhere as well, and shows both the importance attached to the program, as well as hopefully provides lessons for policy planners and administrators to draw upon, both in India as well as rest of the world.

However, before concluding how one could move towards achieving a greater potential, it is important to re-visit two other issues that impact – both the idea and the reality – of foundational identity programs like Aadhaar.


First, there is a somewhat technical debate among the architects of identity systems. Identity projects that typically consist of enrolment, biometrics, identity cards and managing their life-cycle has become a slightly separate specialization than that of mainstream information technology which is led by the large system integration companies. Aadhaar was conceived by the latter, and thus nixed the idea of a robust identity card, usually chip-based that can serve as a carrier of security and information. Since this is in the possession of the individual, there is a sense of empowerment (and privacy) that can be integral to the deployment. However as it has been implemented, Aadhaar for an individual is just a number (and a biometric) without a card – and thus requires online connectivity at all times, needs to be supported by large central data storage and has the proverbial Damocles’  sword of getting hacked hanging over it at all times.

The most optimal solutions often lie somewhere in between, and perhaps more thought should have been given to this aspect. As the implementation stands today, the systems being centralized, is susceptible to manipulation, the same way the older manual systems were. Besides, India does not have strong privacy laws required to check this as yet, and more than anything else, this is of prime urgency. One of the first arguments that has come up before the Supreme Court of India is about the privacy aspect, and the state, through the Attorney General of India (AGI) has contended that the right to privacy is not “fundamental” in the Indian constitution. Refer:

The AGI further clarified that in any case it cannot be used as a grounds for scrapping a scheme like Aadhaar. This has been countered by a battery of eminent lawyers by saying that the Constitution is a living document and right to privacy, especially in the digital age ought to be legally secured. The judgement, as and when it arrives, will indeed have a long term influence on the state’s powers and capacities to inquire into individuals’ lives in India.

Lastly, it needs to be reiterated that there has been too much dependency on biometrics alone. The LPG – DBT prototype itself highlighted – the system as it stands, helped eliminate ghost households, but was unable to categorically identify duplicates, where no biometrics were available (as in the old ration cards). This is certainly an area that will require to be strengthened, as is being done world-wide in similar situations.


Second, there is the classical debate about the role, relevance and inter-relationship between national identity programs and civil (birth) registration, which has critical implications.

Historically, and till large and fast computer systems were deployed, civil registration has been the single point for registering births and deaths and keeping a count on the population, usually through decennial census operations. A brief official account of the history of Indian census operations can be found at:

It must be noted that the first modern census was conducted in 1871, under the then British Administration of India. However, the 1881 census with W.W. Plowden as census commissioner is considered as the first comprehensive and consistent attempt, as it covered not only the British administered territories, but also the autonomous areas (Nizam, Mysore, Baroda etc.) as well as some non-English colonies, such as Goa. It was also the first census conducted under one single unified administration and with a commonly established methodology. The count then (as on the 17th of February 1881) stood at just under 254 Million. The earlier 1871 census was preceded by a number of provincial and city census counts, and the first such recorded exercise being conducted for Allahabad in 1824. Thus the 1881 exercise was nearly sixty years in the making.

Shortly after independence, the 1951 census recorded for the first time, the population of India after partition, which stood at a little over 361 Million. A later Census Commissioner, M. Vijayanunni (1994-99) wrote this about the Census Commissioner at independence, R.A. Gopalaswami (1949-53), in an interesting article about the evolving perceptions about population and demographics in India.

Perhaps yet another milestone was the 2001 census – not only for being the millennial census that coincided with India touching the One Billion mark, but also because it ushered in the use of modern optical scanners for data capture – a methodology that drastically reduced the processing time and cost and at the same time improving the accuracy of the enormous volume of Indian census data. This milestone and evolution was achieved when J.K. Banthia (1999-2004) was the Registrar General, India and Census Commissioner – often referred to as the RGI, in short.

As the designation signifies (introduced in 1949) – this post covers responsibility for civil registration, as well as that of the decennial census. Civil registration in India consists of recording births and deaths only, and for this the RGI presides over a deep hierarchy at the levels of the state, district, municipality / village and even neighbourhoods. To the public, a total of nearly 260,000 points are available across India, where births and deaths can be registered. The RGI’s office produces an annual report on civil registration statistics and the report of 2012 can be found at:

As can be seen that despite this widespread infrastructure, the birth registration is only to the extent of 84.4% and deaths, an abysmal 69.3%. In absolute terms this translates to about 3.4 Million births and 1.8 Million deaths that went unreported in 2012 alone.

The good news is that the gap – between the expected number of births and deaths as determined through a sample registration system (SRS) and those actually registered through the civil registration system (CRS) – is consistently narrowing. In this context it is also useful to be aware that the CRS is only a statistical estimate, which gets corrected over a decade with the actual census count.

One last point that the 2012 civil registration report on India seems to highlight is that, except for the few usually lagging states and regions, the rest of the country seems to return figures in excess of 90% for registered births, which is in line with targets and expectations.

Unfortunately Aadhaar has been, in some sense, pitted against the CRS in India in more ways than one. Immediately after the 2001 census, it was planned that the RGI’s office would take up the task of an upgraded National Population Register (NPR) and this would include the issuance of a Multipurpose National Identity Card (MNIC). A pilot was taken up and even capacities built up for the national roll-out of such a program. However, in the end, a separate Unique ID Authority of India (UIDAI) was set up under the Planning Commission, a separate ministry directly reporting to the Prime Minister, while the RGI reported to the Ministry of Home Affairs (MHA) and thus the Home Minister.

The CRS draws its mandate from the Registration of Births and Deaths Act, 1969 while the UIDAI was based on a temporary quasi-parliamentary directive and is still awaiting full legislation. Meanwhile in 2014, the overarching role of the Planning Commission was curtailed to that of a federal think-tank and the UIDAI administration was transferred to the Department of Electronics and Information Technology (DEITY), yet another ministry that also has under it, the National Informatics Centre (NIC) – the custodian of the Government’s IT infrastructure.

The overall objectives also seem to be slightly at odds. Aadhaar only confines itself to “proof of identity” (ultimately based on the biometrics – fingerprint and iris) and the “establishment of citizenship” is inter alia, responsibility of the RGI, and thus part of the National Population Register (NPR). Citizenship is enshrined in Articles 5 to 11 (part II) of the Indian Constitution and projected through the Citizenship Act, 1955 (refer for relevant excerpts) that has been amended in 1986, 1992, 2003, 2005 and 2009.

Both politically and administratively, this seems a viable arrangement – two entities (and two databases) providing the necessary checks and balances. However, the supremacy of one over the other continues to be fiercely contested.

Also in this context, as part of its rather overwhelming long list of sustainable development goals (SDG), the United Nations has proposed (refer SDG #16.9): By 2030 – Identity for All with birth registration. In some sense, it states that these are two distinct aspects (identity and birth registration) but must be addressed together.


As Aadhaar is free of the constraints that go with determination of citizenship – it is being successfully deployed for example to record India’s street children (believed to be in excess of 5 Million) through a simplified process. It therefore also has the potential to address global issues such as statelessness, as well as phenomena that affect India (and other developing countries) as deeply – of an unreported large number of individuals struggling to be recorded, ostensibly caught between a corrupt state and their own poverty.

Two narrative non-fiction accounts – A Free Man by Aman Sethi (2011) and Behind the Beautiful Forevers by Catherine Boo (2012) poignantly capture the different trajectories of two individuals in Delhi and Mumbai respectively, one choosing to live and die completely off the Government registers, and the other struggling in small steps to be finally recognized as a living citizen of the country of her birth (refer for more information). Surely there is no shortage of other literature as well, that reminds us of the profound importance of ensuring inclusion, even if it has a cost and only addresses relatively small numbers. Many social activists have also reported that individuals belonging to such precarious socio-economic situations have been prompt in obtaining their Aadhaar registration in the hope that at least it will provide them a basic minimum recognition. As expected, opinion is divided, between those who consider this as a positive – of having reached the unreached, and those who think otherwise, due to the unverified nature of their individual status.


Also to conclude, it is pertinent to revisit the ideas underlying it all. For centuries the recognition of an individual to be part of a territory, was cultural. Why does this become insufficient and fall short? Does poverty invariably mean to be stripped of your privacy? Do more prosperous nations fingerprint their citizens? Such questions have led scholars to hypothesize that programs like Aadhaar are merely figments of a lingering colonial mind-set. Others disagree and claim that the balance between history and modernity are found in the present, and Aadhaar is an ideal example of the contemporary times. Deeper down are the questions of poverty, economics and development, and underlying all this is the fact that human beings exploit one another in amazingly corrupt, inhuman and dishonest ways. Can Aadhaar address all this? Only time will tell.

In pragmatic terms however, it is interesting to note that Aadhaar has a significant level of social acceptance in India, which is an important prerequisite for its future success. Desperate situations call for desperate measures – and if Aadhaar can enable the state to critically improve its service delivery and reduce wastage, it is certainly welcome, as DBT has the potential to do. The courts will do well to strengthen the legal framework to protect individual privacy, not only for the dignity that it affords, but also for preventing any mass misuse.

However for such ideals to be achieved – Aadhaar itself will have to properly traverse the last mile – and clean up its stables, so that the requisite stakeholders can come to the table. For example, as DBT expands in financial terms, questions like liability, indemnity and non-repudiation will become paramount and will require assured levels of quality, in order to become part of larger global systems – such as insurance and banking.

If Aadhaar can get there, it will become what the billions of individuals imagine it to be – a highway to a secure and prosperous future, else it could easily degenerate into yet another tool in the hands of petty corrupt officials and then nothing will change.

© Sanjay Dharwadker, July 2015, Utrecht

Categories: Uncategorized

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