In an innocuously titled report on “Decentralized Finance and Digital Assets” released last Saturday, global rating major Moody’s Investors Service has flagged some uncomfortable home truths about India’s ambitious digital identification (ID) programme for residents, Aadhaar. As the world’s largest digital ID programme with biometric and demographic details of over a billion residents, Aadhaar stands out for its scale. But at a broader level, the agency has red-flagged security and privacy risks from “centralised” digital ID systems such as Aadhaar, where a single entity controls identifying credentials. Moody’s, which has mooted decentralised ID systems that give users more control over their data, has also lent weight to worries about the efficacy of Aadhaar’s biometric-based authentication systems to verify identities. “The system often results in service denials, and the reliability of biometric technologies, especially for manual labourers in hot, humid climates, is questionable,” it said. While this observation is of relevance amid the government’s push to switch all payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to an Aadhaar-based payment system, it echoes the concerns raised ever since its launch under the United Progressive Alliance regime.
The vigorous pursuit of Aadhaar, after some initial hesitation, under the present government has manifested in the 12-digit number becoming mandatory for almost all welfare benefits to weaker sections as well as activities such as opening bank or provident fund accounts, securing telephone connections and remitting taxes. Its use, backed by the expansion of access to no-frills bank accounts and mobile phone connections, has indeed enabled the direct transfer of benefits to millions in welfare schemes and weeding out ghosts and middlemen. Yet, there have also been instances of people being excluded from basic services for lack of an Aadhaar or labourers and senior citizens struggling to confirm their fingerprints and retina scans to prove they exist. An audit of the Unique Identification Authority of India (UIDAI) by the Comptroller and Auditor General of India released last year, had flagged lapses that jeopardise privacy and compromise data security, along with flaws in enrolment processes leading to duplication and faulty biometrics. India has pushed for digital public infrastructure like the one built around the edifice of Aadhaar, as a means for service delivery in G-20 nations and beyond. Having appointed a part-time chief to the UIDAI last month after four years, the government must seek an honest review of, and course correction in the Aadhaar programme, before expanding its linkages further, be it for electoral rolls, private entities or MGNREGA payments.