Aadhaar: ID Platform for

inclusive development
Ernst & Young LLP, India
2 March 2016

Disclaimer: The views expressed in this paper/presentation are the views of the
author and do not necessarily reflect the views or policies of the Asian
Development Bank (ADB), or its Board of Governors, or the governments they
represent. ADB Does not guarantee the accuracy of the data included in the
presentation and accepts no responsibility for any consequence of their use.
Terminology used may not necessarily be consistent with ADB official terms.

Rising challenge for public service delivery

World Population 50 years ago:
~3 Billion

World Population today:

~6 Billion

By 2050
UK
70 Million
US
402 Million

Germany
74 Million

Russia
108 Million (-)

China
1.4 Billion (+)

Japan
102 Million (-)

India
1.6 Billion (++)

Practices to provide services and their effective consumption cannot remain the same!
Page 2

* The population figures estimated for the year 2050: Can the Earth cope? Video of Sir David Attenborough

Benefits of G2P programs

flow through several
hierarchical layers, leading
to high volumes of leakages

Governments cannot afford the status quo in

G2P delivery anymore

Centre
State/ Province
District/ City

Town/ Village

Problems in delivering G2P programs

Ghost

beneficiaries
Massive leakage of benefits disbursed in
cash, or at subsidized prices (food, fuel,
fertilizer & others)
Inefficient disbursement systems
Low information visibility

When you have to distribute public goods on a massive scale, you need to identify who you
are making the distribution to, so that the right people get it.
- Prof. Joseph Stiglitz, Nobel laureate economist
Page 3

The challenge for Government of India was...

Of over USD 60 B spent annually by

Govt. of India on welfare payments:

40% leakage in food grains

distribution
USD 200 M leakage in cooking gas
distribution (domestic use)

Less than 20% of Government

benefits reached intended recipients

$$
Food

Health

Cash
benefits

Fuel

Fertilizer

Absence of electronic systems with uniquely identifiable beneficiaries was leading to large
volumes of leakage of limited public resources

Page 4

and existing ID systems were just not ready

50 M

Passport

200 M

Tax ID (PAN Card)

200 M

Drivers license

No ID for high
% of
population

Need for a new ID

Limits

access to public
services
Restricts participation in
formal economy through
financial inclusion

Universal
alternative

1.25 B residents
Breaking

the loop - ID
requiring other IDs as
proofs
Separating ID from its
applications

A unique/ universal ID, much like the US Social Security Number (SSN), had the potential to
become the focal point of inclusion, service delivery and more!
Page 5

The solution for India in 2009!

Unique ID Authority of India (UIDAI) set up to issue a digital and unique ID to every resident,
and to create an electronic ID platform for inclusive development systems

Page 6

What
India learnt from global ID programs
In Conclusion..
Data Capture

Using biometrics, besides demographic data, can help

maximize accuracy, inclusion for 1.25 billion, and security

Standardized
enrolment

Standardization of software and equipment with open

standards, competitive procurement to drive down costs

Form Factor

Card-less system with focus on ID number rather than

card / smart card is convenient, economical and secure

Number Format

Random number is essential to ensure privacy and avoid

discrimination

Mode of
Authentication

Online authentication by authorized agencies is easy to use

and ensures security

ID as a Platform

Open ID platform with easy integration of ID in applications

creates incentives for use and drives innovation

The concept of identity is fast evolving, with online, token less systems shaping up the future
Page 7

Aadhaar - A simple idea with

mammoth ambition
5555 4444 5555

One
Identity

An ID to every
resident

Service Delivery
Transformation
Gateway to social &
financial inclusion

One Individual One Unique Identity

1 September 2010: First Aadhaar issued

2 Dec 2011: 100 Million Aadhaar issued
3 Feb 2015: 750 Million Aadhaar issued
4 Jan 2016: 970 Million Aadhaar issued

Page 8

Number, and not a card

Random number, no profiling
One person, only one Aadhaar
Anytime, anywhere authentication

to enable innovative development

applications in public and private
sector

Database
cleanup
KYC
Financial
transactions
Access
control
ID as unifier

Page 9

DB
cleanup

KYC

Financial
transaction

Remove

fake, duplicate, ghost records; improve data quality

Example: Cleaning of scholarship database with genuine students
Enrolling

in to a new service; Applying for a new product

Example: Registration for Pensions, Mobile connection, Bank account
Money

Transfers, Consumer Banking

Example: Rural livelihood wages, Micropayments, Subsidy transfer
Attendance/

Presence, Access to location

Example: Attendance of govt. staff, purchase subsidized food-grains
Use

of an ID as a mechanism for linking databases

Example: Electronic health records, credit history

DB: Database

Presence
/ access

Impact of Aadhaar
bringing citizen to the centre of
debate

Citizen Centric
Governance

Choice

Page 10

Convenience

Access &
Mobility

Application category #1
Beneficiary database cleanup

Entitlement

Food

Rural
Employment

Pension

Scholarships

Resident Data Hubs at the core

Identity

DB
cleanup

KYC

Financial
transaction

Presence
/ access

Creating logical unified views

Linking Aadhaar

numbers in all databases in

short run, and creating a data hub eventually
Remove fakes & improve data quality over a
defined period
Department specific data and entitlement
parameters such as socio-economic status
can be defined by departments or at a central
hub

Land
Records

Vehicle
Reg.

Nutrition

Health
Insurance

Public
Health

Aadhaar enabled Resident Data Hubs

An integrated approach to electronic service delivery, with resident focus instead of

process and policy focus to bring in the desired accountability and transparency
Page 11

Application category #2
Know Your Customer (KYC)

DB
cleanup

KYC

Financial
transaction

Presence
/ access

eKYC Record
Home

Search

View Record

Settings

Help

Logout

Resident Record
Parameter

Resident

Service operator
with handheld
device

Name

Meena Kumar

Gender

Female

DoB

11/11/1999

Pincode

302015

Address

Golf Course Road, Gurgaon

Exit
Terms of Use | Privacy Policy

Input with resident consent

Aadhaar Number AND

One or any combination:

Finger-print

Iris Scan

OTP on registered mobile

Copyright 2015. All Rights Reserved.

Response

Residents demographic details (Name,

DoB, Gender, Phone, email)

Image / Photo of the resident

Residents address as with UIDAI

Huge opportunity to simplify services such as banking, telecom & government welfare
programs, to enrol beneficiaries seamlessly with standardized data
Page 12

OTP: One Time Password

DoB: Date of Birth
UIDAI: Unique ID Auth. of India

Application category #3
ID as Financial Address

Bank account opening

Paperless account opening

DB
cleanup

G2P Payments using ID as

Financial Address
ID linked to bank accounts
on a central mapper

Addresses challenges for Government

Financial Inclusion with easy account

opening and last mile network setup

Targeted delivery of funds

End-to-end ID view for benefits

delivery

Government

KYC

Financial
transaction

Presence
/ access

Last Mile Connectivity

with Interoperability
ID for banking transactions
using online mobile / microATM transactions

Addresses challenges for Banks

Reduced customer acquisition cost

Reduced cost of transactions

Interoperability with other banks

Bank

Customer
Service Point

Platforms for financial inclusion are expected to reduce leakages, and enhance access
Page 13

Application category #4
Presence and access control

DB
cleanup

KYC

Financial
transaction

Presence
/ access

1
Electronic ID verification can be
used to monitor attendance and
availability of government staff, as
well as workers of rural cash-forwork program

2
Welfare programs such as sale of
subsidized food-grain, kerosene or
fertilizer can use ID verification of
beneficiaries

3
Man-less identity establishment
and access for areas with high
security needs can be enabled

Aadhaar verification platforms can enable creation of customized dashboards to monitor

presence and access, and can thus check daily outlay of goods/ payments etc.
Page 14

InInsummary
Conclusion..
Envisioning possibilities for India

An open and scalable ID Platform

Nurturing a partner ecosystem with payment partners playing a key role
Simple idea for a billion people V/s complex idea for a privileged few
Promotes a platform approach to allow entrepreneurial imagination to solve
the problems of India

"Effective social safety nets like Aadhaar-card based direct cash transfers scheme are being set up to reduce poverty
in India"
- Prime Minister Manmohan Singh, December 2012

Page 15

Envisioning
a future state for Aadhaar
In Conclusion..
ID applications in
Internet of Things

Immigration
Employers
Policing Security
Trading
Utilities
Emergency
Private
Services
Healthcare
Corporate
Affairs

Telecom

Aadhaar
ID-enabled
services

eCommerce

Travel and
Hospitality

Self-Service PCs/Mobile
Kiosks
Devices

Public
Healthcare

ATM

Homes

Statistics
and Planning

Trains

Buses

Education
Transport
Automobiles Checkpoints

Banking/FI
eVoting

Post
Social Security
Page 16

Taxation

Thank You

Page 17