May 1, 2017 2:00 am JST
Nikkei Asia Prizes
Nandan Nilekani's biometric system puts the poor on the radar while cutting costs
AKIRA HAYAKAWA, Nikkei staff writer
Nandan Nilekani explains the Aadhaar biometric identification system in Bangalore on April 17. (Photo by Akira Hayakawa)
MUMBAI -- Selling cellphones used to be a serious chore in India. The paperwork could take days, according to a salesperson at a mobile phone shop. A small, black fingerprint reader has changed all that, however.
"Now, with this, it takes only 15 minutes, and you get your smartphone today," the sales rep said.
A lot of the credit for that convenience goes to Nandan Nilekani, the lead developer of the Aadhaar biometric identification system.
Under the system, every Indian citizen gets a 12-digit ID number tied to a photo, fingerprint and iris scan. Aadhaar "improves government efficiency and living standards," said Nilekani, the first chairman of the Unique Identification Authority of India, or UIDAI.
Aadhaar is about much more than streamlining bureaucratic procedures.
Social welfare is a high priority for the Indian government, but it long lacked the means to accurately identify much of the country's huge population. On one hand, the government has struggled to combat thieves who use fake IDs to steal welfare handouts. On the other, countless poor people who would qualify for food rations and other benefits have been missing out, due to chronic lapses in birth registration.
Aadhaar helps deliver aid to those who truly need it while curbing abuse and reducing wasteful outlays.
The project began in 2006. When the cabinet approved it in 2009, then-Prime Minister Manmohan Singh named Nilekani chairman of the UIDAI. Previously, he had co-founded major information technology company Infosys Technologies, and in a book had mentioned the need for a strong ID system.
The first Aadhaar number was issued in 2010. Now, over 1.1 billion people have registered -- accounting for roughly 90% of the population and making Aadhaar the world's largest biometric ID database. That size comes with a great responsibility to prevent fraud and leaks of personal data. "Some of the best minds in India, and of Indian origin working abroad, and bureaucrats -- they all got together," Nilekani said. His extensive connections and experience as co-chairman of Infosys served the project well.
Not everyone was on board with his appointment. "Why are we entrusting such an important project to a man from the private sector?" one bureaucrat reportedly argued. There was friction, in part, because the UIDAI chair is a cabinet-level post and another ID project was already in the works. But Nilekani ignored what he called "noise" and forged ahead, keeping the government abreast of his progress.
Recalling those days, he likened the project to building a startup within the government.
Billions in savings
World Bank chief economist Paul Romer said of Aadhaar: "The system in India is the most sophisticated that I have seen."
Nilekani said development took about $1 billion, but the investment has paid off in a big way. "The system cuts annual government spending by nearly $7 billion in total," he said.
And Aadhaar continues to evolve. With IDs linked to bank information, the government can directly deposit subsidies and pension payments into verified accounts. In April, a system called Aadhaar Pay began to replace cash, credit cards and smartphone-based digital wallets. Available only to people with Aadhaar-linked bank accounts, it allows for transactions using just an ID number and fingerprint verification. To accept payments this way, businesses need only an Internet-connected smartphone and a fingerprint reader like the one in that cellphone shop.
Aadhaar in Hindi means "foundation" -- and indeed it has created a foundation for reducing poverty and government spending. It also provides a bedrock for the Narendra Modi government's Digital India campaign, designed to spread technology throughout society and create a knowledge economy.
The system, Nilekani said, "will continue to expand."