UID - Aadhaar

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UID - Aadhaar

• Shreerang Chhatre and Ankit Jain
• MIT India Reading Group
• February 24th, 2011

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Motivation for the UID project

• An initiative that would provide identification
  for each resident across the country and would be
  used primarily as the basis for efficient
  delivery of welfare services.
• It would also act as a tool for effective
  monitoring of various programs and schemes of the
  Government.

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Timeline of the UID initiative
UIDAI Unique Identification Authority of India
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Structure of the UID Authority of India
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Basic information about UID (Aadhaar)
http//uidai.gov.in/
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Information collected for UID
What is unique about Indias UID program?
Presentation by Raj Mashruwala, UIDAI
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Strategy for UID enrolment
UIDAI Strategy Overview, downloaded from
http//uidai.gov.in/, RSBY Rashtriya Swasthya
Bima Yojana
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UID enrollment projections

• Total cost of the project is expected to be
  150,000 crore (32 B)
• Budget allotment for 2010/2011 is 1900 crore
  (410 M)

http//www.hindu.com/2009/02/17/stories/2009021756
751000.htm
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Focused efforts to enroll marginalized groups

• Urban poor
• Co-resident enrollment of migrant workers
• Micro-finance institutes and NGOs
• Women
• Micro-finance and self-help groups
• The National Commission for Women
• Children
• Integrated Child Development Scheme (Anganwadi)
  for children under 6 years. ICDS has gt40,000
  centers with 25 million children and 5 million
  expectant mothers
• Compulsory for school enrollment?
• Disabled people
• National Center for Promotion of Employment of
  Disabled People
• Tribals
• State governments in the tribal areas

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Risks involved in the UID project

• Adoption risk
• A critical mass is required for the participation
  of service providers
• Political risk
• Support from state and local governments is
  critical
• Enrollment risk
• Enough touch points in rural areas and enrolling
  60,000 newborns every day
• Risk of scale
• Administration and storage of 1B records
• Technology risk
• Authentication, de-duplication and data
  obsolescence
• Privacy and security risk
• Biometric data security
• Sustainability risk
• Maintaining the initial momentum over a longer
  term

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Pilot scale implementation of the UID project

• First UID issued in September 2010 in in the
  tribal village Tembhli, in Nandurbar, Maharashtra
• 650,000 people in Tumkur and Mysore districts in
  Karnataka have UIDs
• All 28 districts in Karnataka will start
  implementing by end of 2011
• Launched in Kerala this morning

http//www.business-standard.com/india/news/state-
to-be-covered-by-uid-project-by-december/425546/
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What is unique about Indias UID program?
Presentation by Raj Mashruwala, UIDAI
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Micro Banking in India
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Bank account penetration in India
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Challenges faced by banks in rural India

• Access to institutional finance remains
  constrained in rural India
• Lack of identity documentation is a bottleneck
• Inability of banks to do micropayments due to
  high transaction costs Rs 10 per transaction
• 82,000 bank branches cater only to 5 villages
• The poor rarely consumes all of what he/she earns!

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Tipping Point for Financial Inclusion

• Policy Changes
• New entities can act as Business Correspondents
  (Kirana shops, petrol pumps..)
• UEBAs (UID Enabled Bank Accounts)
• No frills bank account, balance lt INR 50K
• KYR serves for KYC
• Technology Infrastructure
• National Payments Corporation of India
• Payments, clearing and settlements large volume
  at very low cost
• UID
• Authentication, traceability and accountability

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UID enabled banking - deposit
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UID enabled banking - withdrawl
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(No Transcript)
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Pricing structure to incentivize the use of UID
enabled micropayments