
Setting a precedence for certainly the developing world and perhaps also for the developed world, India on Thursday set in motion its largest e-governance project that aims to provide a unique identification number to each of its billion plus citizens in the next two years.
Prime Minister Manmohan Singh yesterday invited Nandan Nilekeni one of the founders of the Nasdaq-listed Infosys Technologies, India's poster boy $4.7 billion revenues IT company, to take charge of the Unique Identification Scheme [UIS] for laying down the plans, policies and its implementing so that to all citizens get a unique identification number by 2011.
Nilekeni will obviously have to resign from the Infosys board.
Based on the smart card format, the unique identity will include basic information like name, address, age, residence, education, annual income, etc, as well as photograph and biometric data in a digital format to make identification foolproof. The aim, says the government, is to eliminate the need for multiple identification mechanisms, prevalent across various government departments.
Clearly, the rolling out of a country-wide unique identity scheme, perhaps the first in the world, has multiple implications for India; it is a big leap in e-governance; a major boost for national security; an important administrative reform measure that will bring in transparency in governance; and a move that has the potential to eliminate wastage and leakage of official subsidies.
"This is a project that has significant transformational capabilities. It will allow us to channelize all subsidies through the cards; it can promote financial inclusion; and it can help us provide social security," said Nilekeni in a public response to his appointment.
But above all, it throws up multi-billion dollar business opportunities for not only the domestic technology sector, but also the global technology companies who can look forward to gaining a huge and new market at a time when most top markets in the developed world are under recession.
After all, a billion smart cards for a billion people would require a vast eco-system encompassing data collection, delivery channels, chip designing, smart card manufacturers, application and software providers, system integrators, networking analysts and print companies.
Back of the napkin calculations indicate that the project will create at least a 100,000 additional jobs the next two years, while the entire project would require at least $30 billion to roll out fully.
According to the local IT industry, after having been badly hit by the global meltdown, many tech leaders have been urging the government to accelerate the country's e-governance,and this project was the quick response to that call.
Equally important is the fact that the current Congress-led UPA government has leveraged its blockbuster win in the May general election to bring in some sweeping changes in the Indian administrative process.
The plan to provide a unique identification number has been brewing for a while. It was conceived in 2002 during the BJP Party-led National Democratic Alliance regime under the aegis of Multipurpose National ID Card program. The main aim then was to provide a unique identity to Indian citizens to check illegal immigration from neighboring countries. But fearing that such a move would severely deplete BJP's popularity, it was shot down soon after.
The next Congress Party-led United Progressive Alliance government revived the idea in 2004 to primarily make a difference in its administrative process; it re-introduced the plan with the key objectives of reducing leakage in the government's various welfare programs by assigning a unique identification number to the intended beneficiaries.
For the next few years this plan circulated between various departments like the home ministry, finance ministry and rural development ministry and the registrar general of Census of India until the UPA government, in November 2008, established a Unique Identity Authority under the Planning Commission.
The authority's mandate was to implement the unique identification system for a variety of purposes, including better targeting of government's development schemes such as the National Rural Employment Guarantee Scheme, regulatory and security purposes, and banking and financial sector activities.
In April this year, the government also gave this project its first serious push by allocating $20 million in seed money.
"It is a transformational project for the country," said Som Mittal, president of local IT lobby, The National Association of Software Services Company, popularly known as NASSCOM. "I see this overlaying many underlying projects, creating huge efficiencies for the country leading to enhanced governance and reduced costs."
Nevertheless, this plan is not without concerns. And the biggest downside is that it is based on smart card concept and whether or not the UIDA will have the administrative capability to verify the authenticity of the information provided by the citizens, is a big question mark. After all, the country has already seen a major failure of a similar plan in the past when a smart card-based project to provide cheap food grains to the rural poor could not get off the ground because few revealed their actual financial status.


