IDinsight hosted a panel discussion on June 7th on the policy implications emerging from the newly launched State of Aadhaar Report 2017-18. The event began with Ronald Abraham, Partner at IDinsight, presenting key findings from the 2,947 household survey conducted by the State of Aadhaar team. The panelists at the event included:
- Bindu Ananth, Chair, Dvara Trust
- CV Madhukar, Global Digital ID Lead, Omidyar Network
- Elizabeth Bennett, Senior Manager, IDinsight
- Reetika Khera, Professor, IIM Ahmedabad
- Sunil Jain, Managing Editor, Financial Express
- Zoheb Hossain, Counsel for UIDAI in the Supreme Court
The discussion was enriching and the themes reviewed during the course of the panel discussion can be classified into five categories:
Findings from the State of Aadhaar Report 2017-18
Mr. CV Madhukar found that the report allowed him to think of the nuances in the Aadhaar story while Mr. Hossain thought the report’s work on user perceptions was interesting, stating that: “people’s perceptions are key to how democracy works.” Ms. Ananth was encouraged to see demand side and implementation feedback for Aadhaar presented through IDinsight’s State of Aadhaar survey.
Dr. Khera, on the other hand, felt that more data on what residents of these states thought of mandatory linking and on the number of individuals who had experienced identity fraud would have been more helpful from a policy perspective. She approached the report’s takeaway on exclusion due to Aadhaar-related factors differently, interpreting it as Aadhaar adding new layers of exclusion in PDS instead of the exclusion being lower than non-Aadhaar related factors. Additionally, Mr. Jain wanted to explore reasons why Aadhaar e-KYC wasn’t working faster than traditional methods as per the report’s findings.
Role of Aadhaar in PDS
The role of Aadhaar and the exclusion it causes within the public distribution system (PDS) met with several perspectives on the panel. According to Ms. Ananth, the report documented the relationship between authentication failure and denial of PDS, which is contrary to what is supposed to happen. Mr. Hossain pointed out a notification released in February 2017 that allowed other family members to collect ration on an individual’s behalf if one was unable to do so. He called for action to correct this gap in implementation and to enforce accountability mechanisms. He further recommended future research to understand how override mechanisms are implemented at ration shops in states using Aadhaar-Based Biometric Authentication.
Dr. Khera noted that the use of Aadhaar had added to overall exclusion in PDS. She felt that the role of Aadhaar in PDS was founded on lies since Aadhaar did not have the potential to cater to the pre-existing problems in PDS.
Role of Aadhaar in FI
Ms. Ananth highlighted two aspects of the report’s findings on the role of Aadhaar in financial inclusion. First, she found the use of Aadhaar as an analog ID (showing the letter or photocopy) ironic given its initial unique selling point as a biometric ID. Second, since the Aadhaar enrolment process did not attempt to verify addresses, she opined its use as a paper ID to be inferior to other existing IDs.
Similarly, Mr. Jain found the result of the report on e-KYC not providing the perceived benefits as defying intuition. He supported further action to efficiently implement e-KYC, stating that it has the potential to transform the financial industry by lowering transaction costs.
Adding to Ms. Ananth and Mr. Jain’s remarks, Ms. Bennett encouraged further research to disentangle e-KYC results to understand its current limitations in terms of usage and realized benefits.
Aadhaar and concerns of Privacy
The panelists had varied insights on the report’s findings on concepts of privacy and mandatory linking.
Ms. Ananth felt that an omnibus survey is unlikely to produce high quality responses on privacy. She felt, in general, that there is no neutral framing of questions to better understand these concepts. Individuals are concerned about control over data and about fraud. However, there may not be a full understanding of the dimensions by which fraud can happen. She, therefore, encouraged a separate and more nuanced inquiry into how individuals feel about their data and its protection. Recognising privacy as a personal and abstract notion, Ms. Bennett asserted that asking questions around it is a difficult task and agreed that further research is needed. She noted the work done by Dvara and Dalberg – in their well-received report, Privacy on the Line – provides a good example of how to better understand these concepts.
On the other hand, Mr. Jain stressed that concerns around privacy would exist even without Aadhaar. And asserted if Aadhaar numbers didn’t exist, one could still use an individual’s mobile number, bank data, or tax data for the purpose of profiling.
Emerging Policy Recommendations
Dr. Khera stated that while PDS has had numerous issues (documented in her past research), Aadhaar has only added new layers of problems—not solved any problems. As an emerging recommendation, she urged the use of other technologies (similar to those used in Tamil Nadu and Andhra Pradesh) other than Aadhaar to help beneficiaries secure their rightful entitlements.
On issues of Aadhaar and privacy, Mr. Hossain opined that concerns of profiling and linking exist without Aadhaar. However, the overarching law for Aadhaar prohibits misuse of such data. He recommends a data protection law that safeguards Aadhaar and also prohibits sharing of data.
Ms. Bennett agreed with the importance of setting up a data protection law and a grievance redressal mechanism in light of privacy concerns. She underscored the importance of having an independent data regulator, set apart from UIDAI. She felt that necessary safeguards for residents’ data must be set in place, and underscored the importance of this point in light of the fact that other countries are looking to replicate Aadhaar as a form of digital ID.
With the massive expansion in the number of bank accounts, Ms. Ananth emphasized the role for policy in allowing finance providers (small banks, fintech etc.) to benefit from this expansion, stating that bank accounts opened in the last few years were largely inactive. She further highlighted the role for the government to enable effective working of e-KYC that reduces failure rates for financial institutions.
Mr. CV Madhukar, in his closing remarks, called for more data-driven policy recommendations where Parliament committees working on Aadhaar commission independent research to further inform their work.