India’s Ambitious National Identification Program
The Unique Identification Authority of India has been charged with implementing a nationwide program to register and assign a unique 12-digit ID to every Indian resident—some 1.2 billion people—by 2020. In a new case, Professor Tarun Khanna and HBS India Research Center Executive Director Anjali Raina discuss the complexities of this massive data management project.
In a hugely ambitious project, the Unique Identification Authority of India has been charged with implementing a nationwide program to register and assign a one-of-a-kind ID number to every Indian resident—some 1.2 billion people—by 2020 and to meet an interim goal of issuing 600 million IDs by 2014.
The program involves linking a 12-digit randomly assigned number to a person's biometric data-a photograph, all 10 fingerprints, and iris scans of both eyes--as well as to demographic information, including name, address, date of birth, and gender.
"You are basically denied almost everything if you can't prove who you are."
The scope and scale of the project, and its progress so far in already enrolling 200 million people, make this the largest-scale project of its kind in the world, says Harvard Business School Professor Tarun Khanna, an expert on working with entrepreneurs in emerging markets.
Delivering on the ultimate goal, reaching and successfully identifying each and every Indian resident, is a daunting prospect. "This project is hugely audacious and has never been achieved anywhere before," says Khanna. "There is nothing in the United States or Europe that even comes close to this. They are far from the finish line, but it sure is an amazing start!"
The UIDAI project provides an interesting lesson for companies that are intent on reaching an enormous, diverse population, says Khanna, who has co-written a case on the project, "Aadhaar: India's Unique Identification System," with Anjali Raina (HBS AMP 174, 2008), executive director of the HBS India Research Center in Mumbai.
"Any company that wants to operate in emerging markets that are large and populous, like China, India, Indonesia, or Brazil, has to grapple with this question: How do you reach the person on the street?" says Khanna, who was raised in India and still visits the country several times a year. "The case is a pretty dramatic illustration of the difficulties in doing that, but it also makes clear what it takes to get something like this done."
India's economy is enjoying robust growth with an expanding middle class. But the country, which has 22 official languages, also has its share of huge challenges: widespread poverty with 75 million homeless people, insufficient access to quality education, rampant corruption, and the largest illiterate population in the world.
Additionally, India has no nationally accepted means of verifying residents' identities. For example, even though registration of births and deaths became mandatory in 1969, only 55 percent of births and 46 percent of deaths in India were registered in 2001.
Many residents have no identifying documents at all, and yet multiple documents are required to access government services, such as ration cards for subsidized food. Indians without the necessary documents are often denied services or resort to bribing corrupt officials to access services that they are legally entitled to receive. The case includes the story of one widow who couldn't cash a government check; she was unable to open a bank account because she lacked the proper documentation.
"You are basically denied almost everything if you can't prove who you are," Khanna says. "Imagine walking around town without a photo ID or a driver's license. You can't buy certain things; you can't go to the police and verify who you are. It is a surreal nonexistence."
On the flip side, some residents assume fake identities to collect subsidized food and fuel or even draw fraudulently on other people's pensions-widespread corruption that has led to huge financial losses for the government each year.
The creation of Aadhaar
Aadhaar, which means "foundation" in Hindi, is the brand name used to describe the 12-digit unique number issued by UIDAI. The intent is to facilitate the distribution of public goods to their intended recipients. Fans hope that it will do much more, skeptics worry that it might be overhyped.
"Aadhaar was created to guarantee only identity, not benefits or entitlements, yet the UIDAI team did push for one particular application—that is, to tie Aadhaar to the creation of bank accounts," Raina explains. "It is envisaged that Aadhaar will be used in a variety of other ways to reduce criminal diversion of government subsidies, lessen the burden on taxpayers, and open up food and other services to the people who are entitled to receive them."
In July 2009, the Indian government invited Nandan Nilekani, cofounder and cochairman OR cofounder and former CEO of the global technology services firm Infosys and a champion of private-sector entrepreneurship, to lead the effort as chairman of UIDAI. Nilekani enthusiastically accepted. "What UIDAI is creating is a road, a road that connects every individual to the state," Nilekani said in the case. "How each one of us uses that road, how far we travel along it, is up to each one of us."
Under Nilekani's wing, the UIDAI project has attracted a large number of workers from both the private sector and the government-an unusual partnership in a country that has rarely seen the two sectors mix. "The private sector and the government have traditionally kept each other at arm's length," Khanna says. "The private sector is suspicious of government, and people in the bureaucracy and government sometimes look askance at the private sector, believing them to be pursuing purely private gain."
Nilekani is intent on keeping the UIDAI organization lean and mean, taking in only about 200 workers because "my own experience is that the more people you have, the more time you spend on HR problems rather than doing things," he stated in the case. Yet enthusiasm for the project is strong, and many have offered assistance as unpaid volunteers.
"Skilled people are leaving jobs and careers and are saying they will help with this project for free. People are signing up just for the experience," Khanna says. "That's never happened before for a government position."
Reaching more than a billion people
Almost every decision about building and executing the system has boiled down to one simple statement-how to make it work for more than a billion people. Workers have brought laptops with all the necessary equipment to remote villages in the country, places with no electricity or connectivity. If residents do not have documentation, individuals who who have already been assigned unique identification numbers can introduce residents and validate their information. If residents cannot prove their date of birth, the date they choose is considered the official date.
After the team collects all the necessary information from a person, the biometric data is compared across the extensive database, and when no prior match is discovered, only then is a new number assigned.
The demand for Aadhaar has been huge, creating long lines at enrollment stations. Within three months of the initial rollout of the UIDAI program in September 2010, 100,000 people were enrolled; at this point, about 200 million people are registered.
Other countries, including Australia and Indonesia, are studying the UIDAI system with thoughts of potentially pursuing similar programs of their own. And the impressive scale of the project has attracted the attention of entrepreneurs worldwide, who are eyeing the program with the possibility of basing future applications on the UIDAI system, Khanna says.
"Once the system is in place, people in India will be able to provide their 12-digit number, show fingerprints and iris scans, and immediately a central database will be able to authenticate that they are who they say they are," Khanna says. "That's not something you can do anywhere else in the world."