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The Catalysts
AnupamSaraph
FutureDesigner,Professor,ThoughtLeader

Why Aadhaar cannot deliver

anything it promises
Aadhaar came with a lot of promises. They were brought by some of the brightest in India.
Apr24,2017,12.02AMIST

Aadhaar promises to remove duplicates and ghosts from

government databases, deliver subsidies to beneficiaries, collect
taxes, provide financial inclusion and eliminate corruption. Here
is why it cannot deliver anything it promises.

Aadhaar came with a lot of promises. They were brought by some

of the brightest in India.

Promise 1: Removing Fraud and Duplicates

In a recent interview, Nandan Nilekani claimed: Aadhaar was

used to clean up the beneficiary list for government schemes.
Using the same argument, if its linked, duplicate PANs will go
away and tax evasion will reduce. The issue with driving licences
is again their multiplicity. In all these cases, Aadhaar is being
used to eliminate various kinds of fraud and misuse.

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Contrast this claim with the CAG report No 25 of 2016. The

auditor observed in this report multiple LPG connections having
the same Aadhaar number or same Bank account in the
consumer database maintained by the OMCs. This highlighted
that the use of Aadhaar did not eliminate multiple connections. It
highlighted that beneficiaries also had access to multiple
Aadhaar numbers.

In de-duplication, any two databases can be used for comparison

with each other. The output of the comparison would be
expected to be a list of records that matched and therefore
deemed to be genuine, a list of records where the name matched
but address did not and need verification, a list of records that
are missing from one but present in the other and therefore
deemed to have been excluded from one or likely to be fake in
the other.

Promise 2: Delivering subsidy and benefits

Nilekani highlights that Aadhaar played a big role in

streamlining benefit delivery LPG, kerosene, pensions,
scholarships, etc which proved to be very successful.

The governments data on PDS from Rajasthan, Chattisgarh,

Andhra and Telangana highlight 38-80% beneficiaries have been
deprived of rations. The CAG has observed that more than 4.53
crore domestic LPG consumers could not avail of subsidised
cylinders during 2015-16.

Aadhaar actually adds a denial layer through multiple indi erent

private parties. Subsidy and benefit delivery is now at the mercy
of mobile App developers, iSprit, telecom companies, electricity
utilities, the Authentication Service Agencies, the UIDAI and
sometimes banking correspondents and the NPCI. Without them
the transactions may never happen.

It therefore makes the delivery of benefits and entitlements

anything but streamlined or successful.

Promise 3: Collecting Taxes, preventing tax evasion, widening

the tax net

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Mukul Rohatgi, Attorney General reportedly told the Supreme

Court We have found a number of PAN cards being used to divert
funds to shell companies. To prevent this, the only option is to
make Aadhaar card mandatory.

The Minister for State in the Ministry of Finance had informed the
Rajya Sabha on 31st March 2007 that the number of persons
having duplicate PANs in 13.1 lakhs. This is just about 4 percent
of those who filed returns in 2012-13. On 22nd April 2016 the
cancelled PAN cards were 11,56,894.

The Minister explained that duplicate PAN cards were allotted

due to incorrect data entry, multiple applications by the same
person with varying particulars and allotment both on the basis
of PAN application and the return of income. Clearly Aadhaar has
played no role in identifying duplicates.

The Aadhaar database has entries to ghosts and duplicates

including those issued in the name of gods, animals and plants.
As already highlighted, the use of the Aadhaar database that has
never been cleaned of duplicates and ghosts to create new PAN
cards will end up including ghosts in the new database and
facilitate the very tax evasion that the government wishes to
avoid.

Promise 4: Financial inclusion

Nandan Nilekani describes the whats-app moment of Indian

banking where One can visualise a future where every adult
Indian has an Aadhaar number, a smartphone and a bank
account. Already over 280 million Indian residents have an
Aadhaar-linked bank account.

The Crime Branch of Delhi Police, registered a FIR under sections

409, 419, 120B of the Indian Penal Code and section 66 and 66C of
the Information Technology Act against Axis Bank, e-Mudra for
actually doing presence less transactions. According to the UIDAI,
they used a previously stored biometric to authenticate
transactions in the absence of a person. This indicates that
Aadhaar banking makes individuals completely vulnerable to
frauds.

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Raising concerns that Jan Dhan accounts, opened with Aadhaar

as the sole KYC, can be misused by money mules, RBI had
warned in May 2016 they are very vulnerable to frauds.

RBI Deputy Governor S.S.Mundra had said that third parties can
be used to launder the proceeds of fraud schemes (such as
phishing and identity the
) by criminals who gain illegal access to
deposit accounts by recruiting them as money mules. True to
the warnings, the Jan Dhan bank accounts, which are the tip of
the iceberg in terms of bank accounts opened with Aadhaar as
the sole KYC, had a rise Rs 32,000 crore in Jan Dhan deposits
within two weeks of demonetisation. This demonstrated that
Aadhaar banking aids criminal activities and money laundering.

Promise 5: Eliminating corruption

Social activist Nikhil Dey says, The government claims that the
Aadhaar card will ensure higher e iciency, greater inclusiveness,
and a reduction in corruption. But in Rajasthan, what we are
getting are more ine iciency, more exclusion, and more
corruption.

In Tonk district, for instance, 80% of the rightful beneficiaries

were turned away due to biometric-related issues. In other
districts, the ine iciency rate was 60%. Aadhaar neither prevents
leakages of ration, particularly from the godown to shops, nor
does it deter corruption. Reetika Khera and Anumeha Yadav have
highlighted the corruption in Aadhaar-based biometric
authentication (ABBA) leading to siphoning o of the rations far
more easily on count of Aadhaar.

Cobrapost and CNN Network 18 have exposed that for a cost

between Rs 500 to Rs 2500, Aadhaar o icers agreed to make
Aadhar Cards for applicants without any proof of identification or
proof of address. They also demonstrated that it was possible to
make multiple Aadhaar enrolments and even multiple cards.

The CAG has already pointed out that the savings attributed to
Aadhaar are in fact denial of subsidy to more than 4.53 crore
domestic LPG consumers. The CAG also found consumers with
multiple connections who received subsidy on more than 12
cylinders as well as an advance payment on registration.

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A database of unverified and unaudited numbers cannot play any

role to weed out corruption. It is corruption to use these numbers
to claim they weed out corruption.

The continued use of Aadhaar is contempt of the orders of the

Supreme Court when the information about an individual
obtained by the Unique Identification Authority of India is used
for purposes not permitted by the court.

DISCLAIMER: The views expressed are solely of the author and ETtech.com does not
necessarily subscribe to it. ETtech.com shall not be responsible for any damage
caused to any person/organisation directly or indirectly.

About Anupam Saraph

Dr. Anupam Saraph is a renowned expert in governance of
complex systems and advises governments and businesses across
the world.

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Jointhediscussion

2hoursago
Itisreallypitythatanexcellentidentificationtoolisso
misunderstoodevenbysocalledexperts.DeDuplicationisa
processthatcanbedonebyanyonewhohasevenprimary
knowledgeofcomputers.Whyiswasnotdoneandwhyit
cameinCAGreportclearlydepictsthestateof
implementationandvestedinteresttherealso.Thebenefits
arerealandsavingsareenormous.Incrementaltargetsand
incrementalachievementwouldmakethisschemesucceed.
Settingabsolutegoalandthencryingifthesamearenot
achievedisoftendonebypeoplewhohasverylittle
understandingforpracticality.
1 Reply Share

mathew162003>anhourago
Howdoyousaythatthisisanexcellentidentification
http://tech.economictimes.indiatimes.com/catalysts/asencryptionbecomesmoreubiquitousaglobalsolutiontoencryptionkeysisneeded/2271 5/9
4/24/2017 Asencryptionbecomesmoreubiquitous,aglobalsolutiontoencryptionkeysisneeded|ETtech

tool?Areyouawareoftheresearchreportpublishedin
2010provingthatbiometricrecognitionis"inherently
fallible"?Areyouawarethat80millionpeople,were
declaredfakes/duplicatesbecauseofFalsePositive
Matches?ThereisnogoalinthisshamIDprogram
exceptthatdictatedbyforeignmasters.Pleascheck
beforeyoucomeoutwithopinions.Handingoverdata
oftheNationtoforeignerswouldnormallybe
consideredtreason.Itistheignorantbeliefthat
biometricsprovidesuniqueidentificationthatleads
manyfoolstoacceptthisscheme.
Reply Share

>mathew162003
10minutesago
Pleasegothroughtheprobabilityoftwo
personshavingsamebiometric.Noduplicates
tillnow.IfyougotogetanotherAadhar,system
woulddenyandproduceyouroldAadhar
number.Yourassumptionsareillfounded.
Reply Share

mathew162003anhourago
Beforecommentingonthisarticle,Irequestreaderstowatch
the'HeadlinesToday'paneldiscussiononastingoperation
conductedbythemin2014wherein,thepresentNational
SecurityAdviser,Shri.DovalandpresentITminister,Shri.
RaviShankarPrasadsaidthatthis"ShamID"(that'swhatit
shouldbecalled,notUID)schemeisathreattonational
security.Shri.Dovaladdedthatitcannotachieveanyofits
objects.Whyishesilentnowandwhyistheminister
promotingit?
Reply Share

Mpkanhourago
Theappropriateheadingis"Aadharisnotabletodeliver"and
not"Aadharcannotdeliver".
Reply Share

mathew162003>Mpkanhourago
"Cannot"isabsolutelyspoton.TheShamID,not
"Unique"IDsimplycannotbeused.Moreimportantlyit
isnotneededatallexpectbyforeignerspushingit
throughbabusandpoliticos.Theycashinonour
ignoranceofbothIT/databasesystemsand
limitationsofbiometrics.MpkmaypleaseaskShri.
http://tech.economictimes.indiatimes.com/catalysts/asencryptionbecomesmoreubiquitousaglobalsolutiontoencryptionkeysisneeded/2271 6/9
4/24/2017 Asencryptionbecomesmoreubiquitous,aglobalsolutiontoencryptionkeysisneeded|ETtech

Dovalwhetherhesaid,"cannot"or"notabletodeliver".
Reply Share

mathew162003anhourago
Anexcellentpieceofwriting.IcongratulateDr.Saraph.
Ignoramusesandthosewithvestedinterestsinpromoting
profitseekersoraaidingotherswhoareinimicaltothisNation
aretheoneswhoclaimthevirtuesofthisstupidprogram.
Theydon'tbothorrefusetostudytheissues.EventheCAG
auditreportsmeansnothingtothem.Typicalofonewhosays,
"Ihavemadeupmymind.Don'tconfusemewithfacts"!
Reply Share

Mpkanhourago
Allthepointsmentionedaretrue,buttheyarenottheresultof
Aadharbeinguseless,it'sbecauseofilliterateofficerswho
don'tknowhowtomakeuseofAadharproperly.Bureaucracy
isfilledwithfoolswithzeroknowledgeoftechnology.Aadhar
isapowerfultoolandtechsavvybureaucrats(assumingsome
exist)candowonderswiththis.TheGovt.needstorecruit
peoplewithlogicalabilitiesineachdept.toensuretheyare
abletoworkoncomplexdatabaseslikeAadhar.It'stimeto
changetheofficers,notthescheme.
Reply Share

adwivedi2hoursago
Whataboutmakingitmandatoryformobilenumber?
Reply Share

mathew162003>adwivedianhourago
Onecanmakeanythingmandatorforanything.
Example,usingatoilet!Andthenjustifyitonanyof
manyavailablegrounds.Areyouawareofhowmany
fraudshavebeencommittedbyprivatefirmsenrolling

AnupamSaraph
FutureDesigner,Professor,ThoughtLeader

How does Aadhaar threaten you?

Aadhaar enrollment was completely outsourced to private parties with the sole aim of building
the worlds largest biometric database.
Apr11,2017,12.18AMIST

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4/24/2017 Asencryptionbecomesmoreubiquitous,aglobalsolutiontoencryptionkeysisneeded|ETtech

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