With this information, the government hopes to issue a unique 12-digit “Aadhaar” (which means “foundation”) identity number to every man, woman, and child. If successful, India will build a major new piece of technological infrastructure for a modern economy, while fundamentally transforming the way residents interact with their government.
Proponents of the plan argue that it will lead to a fairer and more equitable distribution of public benefits. Currently, each governmental department works in isolation, maintaining its own separate databases and records. Over time, systematic corruption and mismanagement have populated these databases with fraudulent information. The Indian departments handling social support programs are often the most abused.
Aadhaar may prove to be the most far-reaching and large-scale technology system ever to be implemented in a democratic nation, and it was done with almost no debate.
Innovative banking technologies capable of reaching these marginalized groups could be built atop the national ID system, presenting an opportunity to reshape the nation and help lift hundreds of millions from poverty. Developers aim to create sophisticated Aadhaar-linked bank accounts that could allow for a system of digital payment, such that two villagers could send each other money with just their identity numbers and an Internet connection. The mobile phone market could offer a gateway for India’s masses into the financial system. With almost a billion cell phones in the country, more than twice as many Indians have access to a cell phone than a toilet.
India is a land of small businesses—and from every indication, mom-and-pop shops can’t wait to reap the benefits that Aadhaar has to offer. Residents’ ability to shop will no longer be limited by the amount of cash in their pockets. Additionally, unique identity numbers are the key to bringing multiple different personal records together. They can serve to facilitate beneficial services such as health insurance and background checks. Though well-intentioned, Aadhaar could facilitate surveillance and digitized discrimination of whole segments of the population, grouped by their undesirable characteristics.
These technologies will also enable government agencies to directly target their benefits. Instead of the current inefficient cash distribution system, agencies will be able to electronically transfer money directly into a resident’s account. Residents will be free to choose where to buy their subsidized goods, and thus will gain purchasing power. This will create major incentives for distributors to adopt competitive, customer-oriented practices.
Although enrollment is described as voluntary, in practice, residents will find it to be virtually obligatory. Many important public and private services have agreed to require an Aadhaar number for participation. If a resident chooses not to enroll, he will be denied the basic rights and entitlements he would have previously received. Unique identity numbers can serve to facilitate beneficial services such as health insurance and background checks.