Putting Profit Before Welfare: A Closer Look at India’s Digital Identification System 

Aadhaar is the largest national biometric digital identification program in the world, with over 1.2 billion registered users. While the poor have been used as a “marketing strategy” for this program, the “real agenda” is the pursuit of private profit.

Over the past months, the Digital Welfare State and Human Rights Project’s “Transformer States” conversations have highlighted the tensions and deceits that underlie attempts by governments around the world to digitize welfare systems and wider attempts to digitize the state. On January 27, 2021, Christiaan van Veen and Victoria Adelmant explored the particular complexities and failures of Aadhaar, India’s digital identification system, in an interview with Dr. Usha Ramanathan, a recognized human rights expert.

What is Aadhaar?

Aadhaar is the largest national digital identification program in the world; over 1.2 billion Indian residents are registered and have been given unique Aadhaar identification numbers. In order to create an Aadhaar identity, individuals must provide biometric data including fingerprints, iris scans, facial photographs, and demographic information including name, birthdate and address. Once an individual is set up in the Aadhaar system (which can be complicated depending on whether the individual’s biometric data can be gathered easily, where they live and their mobility), they can use their Aadhaar number to access public and, increasingly, private services. In many instances, accessing food rations, opening a bank account, and registering a marriage all require an individual to authenticate through Aadhaar. Authentication is mainly done by scanning one’s finger or iris, though One-Time Passcodes or QR codes can also be used.

The welfare “façade”

Unique Identification Authority of India (UIDAI) is the government agency responsible for administering the Aadhaar system. Its vision, mission, and values include empowerment, good governance, transparency, efficiency, sustainability, integrity and inclusivity. UIDAI has stated that Aadhaar is intended to facilitate “inclusion of the underprivileged and weaker sections of the society and is therefore a tool of distributive justice and equality.” Like many of the digitization schemes examined in the Transformer States series, the Aadhaar project promised all Indians formal identification that would better enable them to access welfare entitlements. In particular, early government statements claimed that many poorer Indians did not have any form of identification, therefore justifying Aadhaar as a way for them to access welfare. However, recent research suggests that less than 0.03% of Indian residents did not have formal identification such as birth certificates.

Although most Indians now have an Aadhaar “identity,” the Aadhaar system fails to live up to its lofty promises. The main issues preventing Indians from effectively claiming their entitlements are:

  • Shifting the onus of establishing authorization and entitlement onto citizens. A system that is supposed to make accessing entitlements and complying with regulations “straightforward” or “efficient” often results in frustrating and disempowering rejections or denials of services. The government asserts that the system is “self-cleaning,” which means that individuals have to fix their identity record themselves. For example, they must manually correct errors in their name or date of birth, despite not always having resources to do so.
  • Concerns with biometrics as a foundation for the system. When the project started, there was limited data or research on the effectiveness of biometric technologies for accurately establishing identity in the context of developing countries. However, the last decade of research reveals that biometric technologies do not work well in India. It can be impossible to reliably provide a fingerprint in populations with a substantial proportion of manual laborers and agricultural workers, and in hot and humid environments. Given that biometric data is used for both enrolment and authentication, these difficulties frustrate access to essential services on an ongoing basis.

Given these issues, Usha expressed concern that the system, initially presented as a voluntary program, is now effectively compulsory for those who depend on the state for support.

Private motives against the public good

The Aadhaar system is therefore failing the very individuals it was purported to be designed to help. The poorest are used as a “marketing strategy,” but it is clear that private profit is, and always was, the main motivation. From the outset, the Aadhaar “business model” would benefit private companies by growing India’s “digital economy” and creating a rich and valuable dataset. In particular, it was envisioned that the Aadhaar database could be used by banks and fintech companies to develop products and services, which further propelled the drive to get all Indians onto the database. Given the breadth and reach of the database, it is an attractive asset to private enterprises for profit-making and is seen as providing the foundation for the creation of an “Indian Silicon Valley.” Tellingly, the acronym “KYC,” used by UIDAI to assert that Aadhaar would help the government “know your citizen” is now understood as “know your customer.”

Protecting the right to identity

The right to identity cannot be confused with identification. Usha notes that “identity is complex and cannot be reduced to a number or a card,” because doing so empowers the data controller or data system to effectively choose whether to recognize the person seeking identification, or to “paralyse” their life by rejecting, or even deleting, their identification number. History shows the disastrous effects of using population databases to control and persecute individuals and communities, such as during the Holocaust and the Yugoslav Wars. Further, risks arise from the fact that identification systems like Aadhaar “fix” a single identity for individuals. Parts of a person’s identity that they may wish to keep separate—for example, their status as a sex worker, health information, or socio-economic status—are combined in a single dataset and made available in a variety of contexts, even if that data may be outdated, irrelevant, or confidential.

Usha concluded that there is a compelling need to reconsider and redraw attempts at developing universal identification systems to ensure they are transparent, democratic, and rights-based. They must, from the outset, prioritize the needs and welfare of people over claims of “efficiency,” which in reality, have been attempts to obtain profit and control.

February 15, 2021. Holly Ritson, LLM program, NYU School of Law; and Human Rights Scholar with the Digital Welfare State and Human Rights Project.