India’s digital ID system has become ubiquitous and is rapidly being incorporated into service delivery. With more heat than light so far in the Aadhaar debate, the State of Aadhaar report is a major step forward in understanding the world’s largest ongoing transition to digital governance, one that is being watched closely by many other countries.
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With few systematic studies of its impact on program beneficiaries, the debate on Aadhaar has, so far, seen more heat than light, but this is changing. The State of Aadhaar Report looks into many dimensions, including beneficiaries’ views of the new digital delivery systems, and the impact of the new approach—which combines financial inclusion (Jan Dhan accounts) Aadhaar, and mobiles (the so-called JAM trinity)—as well as financial inclusion and digital payments.
For the policymaker looking to improve services and the delivery of benefits, or for the financial institution trying to expand its customer base, the gap between technical solutions and the situation of the average technology user represents fertile ground for the many new opportunities that the digital economy provides.
How do you give over a billion people a digital ID within five years? How do you improve learning for 200 million children in India and countless millions worldwide within a decade? How do you improve health outcomes for billions of poor people and achieve the goals of Universal Health Coverage within a generation? How do you solve the world’s most pressing challenges, not incrementally, but with the urgency they demand?
Aadhaar has already demonstrated the potential of digital ID to transform systems of governance and increase efficiency of private transactions. By addressing the genuine concerns of individual privacy and data protection, it can lead by example as it has done on the technological side. The right to privacy judgement by India's Supreme Court is an opportunity to make Aadhaar a bigger success than it already is. India can learn from other countries to do just that.
The state of Rajasthan in north India has become the digital frontier, with a program that registers all family members under a single identity document known as the “Bhamashah Card,” but it still has to overcome significant challenges of poverty and inequality. In a state that is similar in size and population to Germany, it is no small achievement to take on the ambitious task of providing each family with a unique ID and deliver it within a short span of three years.
India’s shift towards direct benefit transfers (DBTs) is on the fast track. According to official statements, in the 2015-16 fiscal year the central government deposited nearly $5 billion of subsidy and welfare payments directly into the bank accounts of 300 million beneficiaries. It has also set an ambitious target to transfer all payments to the Aadhaar-based biometric DBT platform by the end of 2017. This will surely be the greatest subsidy reform in the world, but we need more data to accurately evaluate its impact.
The biometrics revolution has allowed more countries to create strong ID systems for their citizens. These systems have mostly relied on fingerprinting, but with the advent of low-cost, highly effective iris readers this is about to change.
Enrollment in India’s biometric-based universal ID program Aadhaar is approaching the remarkable count of 790 million and nearing saturation levels — 90 percent or more — in some states.