UIDAI: What Nandan means to Nalanda……….Pankaj Mishra
Munchun Devi, 28, a resident of Masihadeeh village in Nalanda, Bihar, has never heard of Nandan Nilekani. Is he a sarkari babu (government official)? she asks. She has no clue that he is the reason why she is standing in a queue, awaiting her turn to submit indelible impressions of her face, fingerprints and iris to the government. In return, she will get a 12-digit number with which every government agency and even banks will identify her for the rest of her life.
Devi is among the two dozen folks from her village who have turned up to participate in a pilot being conducted by the Unique Identification Authority of India (UIDAI) the worlds biggest citizen database project, led by its chairman Nilekani. I thought a movie is being shot here. But I am told this set-up has been created to capture our identities, she says.
Its been an eventful summer day for the villagers of Masihadeeh. Earlier in the day, two volunteers had visited their homes to record details about each family member, their occupation, age, etc. The single-page forms were handed back to villagers, duly filled, and they were asked to visit the panchayat (village council) building later in the day for verification. All of this will culminate in 20,000 residents of Nalanda getting an UID number, or Aadhaar, as it is now called. The pilot is in its last lap now 19,000 residents have already completed the process that Devi is about to do.
Nalanda district, located 50 miles south-east of Bihars capital Patna, along with Mysore in Karnataka and Medak and Krishna districts in Andhra Pradesh, is among the earliest pilots for the identity project. The learning from these trials will form the foundation on which the identification exercise will be rolled out to over a billion citizens. About 600 million will be covered in the first four-and-a-half years.
On the outside, Masihadeehs panchayat building, the centre of all the action today, is just another non-descript structure… patched roof and faded, worn walls. Inside, the importance of the project is completely lost on Masihadeehs residents. Most of them initially see this as just another government exercise. I am not sure what UID is, but I am here because its a government initiative and I am sure it will bring some good, some day, says Jagdish Kevat, a 55-year-old farm worker. Like most in 23 lakh residents of the district, Kevat works the ground, producing rice, potato and onion.
The district epitomises the challenges faced in a majority of Indian villages, home to 70% of the nations citizens. We picked up blocks in Nalanda for the UID pilot because this is the toughest anywhere in India its the most backward pocket and is located the farthest from the district headquarters, says Sanjay Kumar Agarwal, district magistrate and collector of Nalanda.
Officials have now realised that UID booths should ideally be located not more than a kilometre from the homes of the people being covered. Setting up booths and installing equipment with proper power back up are among other last-mile challenges, especially in remote villages. The team has now learnt to carry their power generators wherever feasible. Even after booking a generator, it is sometimes rented out to a local villager for marriage function, says Pushyamitra Pandey, an associate programme manager with the UID project.
Apart from learning to cope with these challenges, the UID officials are also assessing the quality of data captured and time taken for each registration.
Its Devis turn before the camera now. She walks into the panchayat building. Everything inside appears alien to her. She stares at the four portable computers from
Chinese tech firm Lenovo, perched on makeshift tables of re-arranged bricks. What are the four television-like screens doing here, she wonders. It is her first encounter with computers. Four fluorescent bulbs, similar to the ones used by Devis family during her marriage in November last year, bathe the hall with intense white light. She swears she has never seen so much light in one room.
Besides her identity, the pilot will also capture a whole set of information about Devi name of the family head, number of cattle, annual income, health and life insurance, educational qualification and religion. UIDAI is still deciding what pieces of information it will need and what it will not, when national rollout begins. There is a lot of interest around this data. It could be one way to unlock the fortune at the bottom of pyramid.
Banks, for example, could be among the earliest to benefit. One of the reasons why millions are excluded from formal banking is lack of an identity proof. UID will go a long way towards fulfiling our know-your-customer (KYC) norms in a safe and inexpensive way, says Somak Ghosh, Yes Banks co-founder and group president for corporate finance and development banking. Banks, he says, would be more than willing to pay for identification services. This could help millions to access formal banking.
Visambhar Kumar, a 27-year-old farmers son from Masihadeeh is one example. He earns around Rs 25,000 annually and is realising that he needs to manage his familys finances. I plan to open a bank account with a private bank in Patna, but there is no way I can give them an address proof, he says. He is also planning to buy a mobile handset. With a bank account, he will find it easier to access credit. He is happy to learn that a UID number will make all of this easier.
Research firms and experts reckon that 500 million Indians are out of the banking system. More than half of Indias farmers do not have access to credit from formal banks.
UIDAI is also in talks with banks to make sure that the Rs 100 is directly credited to peoples bank accounts, Nilekani told ET in an interview done a month ago. This way, people who are not financially included will also be allotted a bank account number. By using UIDs database, banks can lower their cost of account opening and maintenance and achieve faster break-even with low-income customers.
Research firm CLSA estimates that the UID exercise can bring nearly 125 million people into the banking system over the next five years. These folks, according to CLSA, are primarily from poor, below the poverty line (BPL) families who otherwise will have no way to prove their identities.
This could also free villagers from the clutches of private money lenders. Chandeshwar Lal, a 45-year-old farmer, is also in the queue outside the panchayat office. He works on others farms to earn his living. Lal, who had to mortgage his farm to borrow Rs 50,000 from a local lender for paying off his earlier debts and spend on his daughters marriage, is now paying over 35% interest on the amount. You are saying this identity can help me open bank accounts and avail loans with pride that means a lot, he says.
In its report titled Whats in a number, CLSA estimates that the poor pay $10-12 billion in usurious interest each year. The authors of the report studied interest rates charged by private money lenders and arrived at the burden on the rural poor. Even microfinance institutions (MFIs) charge 20-30% interest.
The Reserve Bank of India wants to lessen this burden and ensure that cheaper bank credit is available to the rural population. Our approach is that those who are borrowing from MFIs must now borrow from the banks. And those who are borrowing from the money lenders must borrow from MFIs, says KC Chakrabarty, deputy governor, RBI. What we have to do is bring competition for MFIs (by getting banks to go rural). When a bank reaches there (rural areas) they will give the money at 10 percentage points cheaper than the MFI… The RBI believes that the UID project could accelerate financial inclusion.
India already has 70 million permanent account numbers for income taxpayers, 60 million passports issued by the ministry of external affairs, 90 million drivers licences, 240 million bank account holders and nearly 170 million LIC policyholders. More pertinent, it also has 150 million BPL identifications. What good is another citizen database? A lot, say government officials, battling rampant corruption in Bihar and UP.
Last year, Sanjay Kumar Agarwal, district magistrate and collector of Nalanda, uncovered nearly 35,000 cases of fake, duplicate identities in the governments incentives programme for BPL families in the district. We are facing a huge identity crisis in some of these programmes, and this is where UID holds great promise, says Agarwal.
Nearly half of the 10 people ET spoke to in Nalanda did not have any form of identification, not even the BPL card. The Aadhar number, the first of which the UIDAI hopes to roll out in August this year, will be their first proof of identity.
CLSA researchers say that more than 40% of the governments $250 billion in subsidy and social spending in select schemes planned over the next five years is likely to be siphoned off, mostly by ghosts and undeserving recipients. CLSA researchers interviewed several government officials and sifted through estimates put out by the Planning Commission to arrive at the figure.
Munchun Devi is oblivious to all this macro-economic rationale behind the UID project. She is keen on her Aadhaar number for more mundane, yet practical reasons. She is married to Vijendra Paswan. Her husband, like millions of migrant labourers, chase construction jobs in Indias cities. Earlier this year, Devi was with Paswan in Gurgaon, where he worked at a construction site. One evening, cops in the city stopped Devi and Paswan on their way back from work, and asked them to prove that they were a married couple. If I can prove my marital status, its a good reason to have the number, says Devi. UIDAI plans to link details of each family member by integrating them with the unique number assigned to head of the family. This will help capture annual income of the families and ensure that details about parents and spouses are stored as a common field.
Back in Nalanda, the volunteer takes Devis form and reads out all the written details to her. It takes around 2-3 minutes, much less than almost half-an-hour it took in the morning for filling the forms at her residence. Since many of them cannot read or write, and may not know whats written on the forms, we have to verify every detail again, says Pramod Kumar, who is part of Smaarftech Technologies, the firm providing local assistance to the UIDAI pilot in Nalanda.
Smaarftech, a company that provides e-governance solutions, is a veteran of sorts in this kind of work. The firm has already captured identity details of nearly two million job seekers in Bihar under the National Rural Employment Guarantee Scheme (NREGS).
When Nilekani travelled to Patna last year seeking assistance from the state government, he was surprised to find that Bihar already had such programmes. The UID officials saw the quality of fingerprints captured by us for the smart card, and said its above US benchmarks, says Binod K Mishra, project director of Smaarftech.
Smaarftechs Kumar picks up a barcode reader uses it to scan Devis form. It captures the form number and ensures that the form is indeed original. Then, Devi is asked to press both her palms on a device which captures each fingers print separately. Having captured 10 fingerprints, the volunteer asks Devi to gaze into an iris recognition device, which captures a graphic image and converts it into digital templates. This iris recognition device comes from Florida-based Crossmatch Technologies, and is used by agencies like NASA and the Department of Homeland Security in the US.
Devi has now come to the end of her UID adventure. Only the photograph is left. She is ready, sitting before the camera, her saree draped around her head. Kumar requests her to uncover her head to ensure that the image is clear…she blushes and everybody bursts into laughter.
(With inputs from M Rajshekhar)