CV Madhukar
Investment Partner

Building the Foundation for a More Inclusive, Secure Digital Identity in India

November 7, 2017

About two years ago, I was having a casual conversation with a friend who was heading the Department of Food and Civil Supplies of a prominent state in India. As we got talking, he mentioned how Aadhaar — India’s state-issued digital identity system — had officially become the basis for identifying beneficiaries of their subsidised food grains programme. He added that Aadhaar was also yielding substantial financial savings within the agency, by eliminating ghosts and duplicates in their system.

While I was impressed with these savings claims, my immediate response to him was in the form of a critical question: what was Aadhaar’s exclusion rate? Meaning, how many people were being denied food rations because they either did not have Aadhaar or their Aadhaar online authentication wasn’t working? His answer was inconclusive, because the department had not quite tracked it rigorously.

I checked elsewhere to see if there was anyone in the government of India keeping track of all its programmes with an Aadhaar requirement. To my surprise, I found that there wasn’t anybody in the government doing this.

That set out alarm bells in my head. For a programme so large and ubiquitous, surely we needed to monitor it more closely as to ensure that no individual is denied the benefits she is entitled to. While journalists and activists were bringing attention to the issue, there was a clear need for systemic and rigorous tracking of data on how this new digital public infrastructure was impacting the lives of people.

Our first step was working with IDinsight, an independent research group, to compile what was publicly known about the system. The findings were published earlier this year in the “State of Aadhaar” report, which set the baseline for tracking the evolving adoption of Aadhaar across the country. This report is publicly available, and was jointly released by the Minister of State for Finance, Mr. Arjun Ram Meghwal, and the CEO of the Unique Identification Authority of India, Dr. Ajay Bhushan Pandey.

Secondly, we supported the Indian School of Business (ISB) to establish the Digital Identity Research Initiative (DIRI), a multi-stakeholder research effort to look at the question of exclusion in its many different forms, across government programmes and across states.

A key goal of this effort will be to develop Policy Briefs that provide actionable ideas to some of the most urgent issues involving Aadhaar. ISB is working to build DIRI as a larger ecosystem of academic and research institutions across India, so as to capture the various dimensions of Aadhaar and its applications in different states.

We expect this collaborative approach to have multiple benefits. Strengthening the research capacity among several Indian universities to study Aadhaar, providing geographical diversity on the sources of data and analysis, and also mitigating any particular biases that an institution may have, are all among the important reasons to build the research ecosystem.

Even as we reflect on these efforts, there has been a growing debate on the security of data and privacy. At Omidyar Network, we fundamentally believe that digital identity has the potential to empower people to participate fully in society and the digital economy, but only if it is available and useful to the individual, non-discriminatory, and designed for inclusion, meaningful user-control, and privacy.

As we have articulated in our point of view on Digital Identity and Privacy, we believe identification systems must be designed and implemented with people at the centre, with an ingrained focus on protecting individual privacy and basic rights. For us, this means baking in strong privacy protections into technical and regulatory infrastructure, ensuring robust safeguards, user autonomy, and independent oversight.

To that end, the decision of the Supreme Court of India in August that ruled in favour of citizens’ fundamental right to privacy is a major step forward. There is much work to be done to ensure that the spirit of the fundamental right to privacy decision is realised in practice.

We think these are useful starting points for our work in India. As we do more, we expect to engage with a wide range of stakeholders in government, civil society and the private sector to ensure Aadhaar becomes a tool for inclusion and individual empowerment.

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