Subhashish Bhadra
Associate, Investments

Why We Invested: Digital Identity Research Initiative (DIRI)

July 12, 2017

Just as railroads provided the infrastructure for life in the nineteenth century, digital identity is providing the infrastructure for the twenty-first century. Despite the accelerating adoption of technology, the World Bank estimates that over 1.1 billion people in the world are without official identification, which prevents them from accessing basic services like banking, healthcare, voting, and government support.

India has made significant strides in providing a digital identity system for its residents with the introduction of Aadhaar, which means “foundation” in Sanskrit and many Indian languages. It has emerged as the largest state-issued digital identity system in the world, with more than 1.15 billion people enrolled. The scale and scope of the program has caught the attention of policymakers around the world: what happens in India matters globally.

Beyond just enrollment, Aadhaar represents a transformational moment in the way citizens, governments, and businesses interact with each other. The scale of the system is staggering: each month, over 130 million Indians authenticate their identity using a paperless and real-time service. Since 2014, 44.7 million bank accounts have been created in minutes, and over 400 million individuals’ bank accounts are now linked to Aadhaar, allowing the Indian Government to transfer nearly Rs.22,000 crore ($3.3 billion) to beneficiaries via their bank accounts last year. The “India Stack” built on top of Aadhaar is driving innovations in sectors ranging from education to healthcare, in both the public and the private sectors.

As in our work globally, the individual is at the core of our work in digital identity in India, including access to entitlements, empowerment, dignity, and privacy. Our research interest in Aadhaar began nearly two years ago when we commissioned IDinsight to conduct a scoping study with to assess the level of knowledge around Aadhaar: it concluded that there is a pressing need to generate evidence on the benefits, costs, use cases, and risks of the program. Robust empirical and independent research has not kept pace with the growth of Aadhaar, and analysis tends to rely on anecdotal and small-sample studies, which do not usefully inform policy development.

Our first step to resolve this was to work with IDinsight to compile what is publicly known about the system and set a baseline for our knowledge of Aadhaar through the “State of Aadhaar” report. The second was to fund the Indian School of Business (ISB) to establish the Digital Identity Research Initiative (DIRI). The facility will fund researchers from ISB and other institutions whose work seeks to better understand the impact of Aadhaar, prioritizing themes with immediate policy implications.

ISB is a natural choice for us to partner with on this initiative. It has the independence and credibility to undertake such an endeavor and consistently displays strong commitment to policy-oriented research in India. ISB’s network and ability to draw from researchers on this topic, both within India and abroad, was a crucial reason why we decided to partner with them. We are aiming to build a larger ecosystem of researchers from institutions in different parts of India who will study the various dimensions of Aadhaar and its applications.

We hope that the DIRI helps answer some of the most important questions about Aadhaar. It will not only be helpful for policymakers in India, but used by all those looking to learn lessons from the Indian experience with identity, thereby driving empowerment across the world.

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