Aadhaar Presents A Plethora Of Opportunities For India Inc.

The $1.6 billion 'Aadhaar' initiative by the Indian government will change the lives of a billion residents very soon. Initially conceived by the Planning Commission, Aadhaar is basically a 12-digit unique number which the Unique Identification Authority of India (UIDAI) will issue for every Indian resident. The numbers will be stored in a centralised database and linked to the basic demographics (name, age, gender and address) and biometric information (photograph, 10 fingerprints and iris) of each individual. According to current plans, by 2014, around one million new ids will be issued every day, thus completing 50 per cent of the enrolment. Needless to say, such an initiative will also create numerous opportunities in IT services, biometrics, credit profiling, banking, education and hospitality space.

Experts converging at the VCCircle Insights on The Aadhaar Project, held at the ITC Grand Central, Mumbai, discussed the implications in great details. The event did witness prominent investors, architects and builders behind the initiative meeting on a common platform to discuss its mission, as well as the investable opportunities created by the project.

The event featured many prominent personalities who shared their views on the implication, challenges and future possibilities of the Aadhaar project. The speakers included Sanjay Jain, chief project manager (Product Monitoring Unit), UIDAI; Govindraj Ethiraj, volunteer, UIDAI; Abhinav Sinha, co-founder, Eko India Financial Services Pvt Ltd; Sreeni Tripuraneni, chairman & CEO, 4G Identity Solutions Pvt Ltd; Dinesh Nandwana, chairman & MD, Vakrangee Softwares and Sanjay Swamy, a former volunteer of UIDAI.

They covered a wide range of topics including the possible opportunities that Aadhaar might throw open for Indian corporates, its impact on economy and finance, the opportunities it would present for IT, technology & hardware, products and innovation, as well as retail, telecom and e-commerce, and finally, the challenges faced during the project implementation.

UIDAI & The Aadhaar Project Established in February, 2009, the Unique Identification Authority of India (UIDAI) was set up with the single purpose of providing every Indian resident with a unique identification number. The authority would come up with a database containing simple biometric data including iris and fingerprints. A venture of the Planning Commission of India, the initiative has appointed Nandan Nilekani, former co-chairman of Infosys Technologies, as its first chairman. Ram Sewak Sharma, an IAS Officer of Jharkhand government, is the Director General and Mission Director of the Authority.

"Aadhaar is a federal government project and not a joint venture," clarified UIDAI volunteer Govindraj Ethiraj. "Its focus is to provide a portable ID to all the residents in India. It will also focus on providing identities to the people, 'outside' the reach of the developmental programmes," he added.

The residents will have to submit their photographs, their biometric data (iris and fingerprints) and demographics (name, date of birth, gender and address) to an enrolment agency (currently a total of 200 are operating) which, in turn, will send the recorded data to a registrar. These agencies are enrolled by the registrars (currently 60 in number), which are basically government bodies like the state governments or NSDL. The data collected by the registrars will be sent to the UIDAI who processes the data and based on the information, sends an Aadhaar letter to the concerned individual via the Indian Post.

While Karnataka government has taken a somewhat slow approach towards UID enrolment, Maharashtra has started the initiative in right earnest and begun the enrolment process in all the 34 districts. Till date, Andhra Pradesh has started enrolment in six districts. A total of 7.1 million Aadhaar letters have already been issued and twice the amount of data is being processed.

How Aadhaar Helps

"The Aadhaar project will provide IDs to all the residents of the country. I say residents and not citizens because the UID is for everyone who are residing in India legally, which means even a foreigner can get himself registered for UID if he has a work permit and is working in the country," said Sanjay Swamy, a former volunteer of UIDAI. "The enrolment process is voluntary as of now, but the focus of the government is to make the services so lucrative that everyone will enrol."

The Aadhaar project will provide a portable ID to every Indian resident, with the help of which he/she can open a no-frill bank account in any Indian city, irrespective of the residential address. One can also purchase mobile SIM cards without worrying about identity and address proof. Also, a business correspondent (appointed by a bank) can provide access to basic banking services using the microATM device. The services include making deposits, dispensing cash for withdrawals, process funds transfers or answering balance enquiries. The users can transfer money from his/her UID in exchange goods or hard cash from the business correspondent.

The UID can also function as a national skills register. Therefore, when you call a plumber to your place, you can actually track his credibility and his experience.

"The head of the family can actually introduce all other members of the family. But we are providing everyone with a personal UID to solve the problem of dependency," added Jain.

Biz Opportunities

Aadhaar will create an eco-system with the potential to drive many other applications. It will drive a demand for applications and services, for products, for the Internet connectivity, for identification and authentication devices and also for new channels to ensure service delivery. According to Dr Sreeni Tripuraneni, chairman & CEO of 4G Identity Solutions, the company is working closely with four registrars across 16 states and will cover about 50 million residents. It is also the first ones to conduct Proof of Concept (POC) for the Aadhaar project.

IT Companies: The potential applications will include identification services for delivery of government welfare programmes like Public Distribution System, National Rural Employment Guarantee Scheme, and social security pension and girl child schemes. IT companies can also develop applications for immigration and border control systems like biometric passports which will comply with ICAO standards, biometric visas and e-Gate systems.

In addition, Aadhaar can revolutionise the way healthcare is delivered across the country by introducing electronic patient record. This will push the demand for suitable software which can be used in hundreds of hospitals and other healthcare institutions. It will also assist in electronic identification of patients.

Since Aadhaar can help deliver financial services, there will be further opportunities for software development firms. The potential clients can be banks and other finance and micro-finance institutions.

There are opportunities in the mobile space as well, as Aadhaar can link one's cell phone to the bank account and change the way payments and transactions are made.

Hardware Companies: Aadhaar will soon ensure integration of service delivery for all schemes and services. This, in turn, will lead to an increased demand for hardware and software, as well as databases and middleware.

The demand for point of sales devices (POS), which are used for authentication of residents and delivery of services, will only increase with time. The existing POS devices have limitations in terms of fingerprint matching (due to poor quality of fingerprints). Also, the quality of algorithms used is poor and hence, there will be a growing requirement for POS devices which have more accurate and faster matching capabilities, good quality sensors and faster algorithms.

Additionally, the iris-based POS devices will have huge potential. Since the PDS itself requires more than 5 lakh POS devices, the requirement can actually go into millions. Also, there will be requirements for smart cards for secure credentials.

In fact, there can be requirement for millions of authentication devices at different places like the citizen service centres, offices, educational institutions, healthcare facilities, stations and airports. Additionally, access control can be used for granting safe access to public zones and high-security areas. Iris-based ATMs can also be introduced which will help prevent identity theft, electronic fraud and employee fraud.

Other Tech Companies: The technology companies can provide verification algorithms, identification algorithms and matching engines. Then there is the fingerprint sensors for enhancing the quality of the images captured. Technology companies can also help enable fingerprint/iris authentication using mobile phones.

The Challenges Ahead For Aadhaar

While biometric registration can start at the age of 15, demographic data can pose a problem for many. If the demographics of a person are not available, then an introducer, who is already registered, can vouch for the person concerned. But although it may work well in villages, it is sure to pose problems in large cities. Moreover, the authentication process can only take place online and hence, it becomes a problem where Internet connectivity is absent.

As of now, there is no policy as to what happens if someone misplaces his or her Aadhaar letter. And finally, in spite of handicap enrolment being done, authentication at the point of purchase is a problem yet to be solved.

"Although 69,67,735 Aadhaar have already been issued as on May 24, 2011, 99 per cent of the population are still to be reached. A lot of infrastructural changes will have to be made for creating mass human resources for UID enrolment and reducing the timeframe for issue of UID," said Dinesh Nandwana, chairman & MD, Vakrangee Softwares.